The government is looking for new options to combat rising fuel prices

The government is looking for ways to stabilize prices for petroleum products against the backdrop of their multi-week rise. In particular, the authorities may return to the idea of ​​introducing a protective duty on fuel exports, which, according to the idea of ​​the relevant ministries, should only work against unscrupulous exporters. But market participants are not confident that the mechanism will provide the required effect.

The Ministry of Energy and the Ministry of Finance proposed introducing a protective duty on the export of all types of petroleum products in the amount of $250 per ton to stabilize the situation on the Russian fuel market. This option, according to Kommersant, was discussed on September 15 at a meeting with Deputy Prime Minister Alexander Novak. For bona fide suppliers who fulfill Ministry of Energy quotas for supplies to the domestic market, the authorities will compensate the duty through the reverse excise tax on oil. In September, the rate for the export of light petroleum products is $6.4 per ton, in October it should rise to $7.1 per ton, and from the beginning of 2024 it should be reset as part of the tax maneuver.

The proposal was received extremely negatively by market participants, who emphasized that the criteria for assessing “bona fide exporters” were unclear, and implementation was extremely difficult. The relevant ministries and Alexander Novak’s office do not comment on the situation. According to Kommersant’s sources, the possibility of a complete temporary ban on fuel supplies abroad is still being considered.

The final decision, Kommersant’s interlocutors clarify, has not been made: the government and oil companies will continue to discuss the problem of a sharp rise in prices for all types of petroleum products. For example, AI-92 gasoline only since the beginning of September at wholesale trading at St. Petersburg International Trading Exchange has risen in price in the European part of Russia by 9%, to 70.44 thousand rubles. per ton, grade AI-95 – by 2.2%, to 76.4 thousand rubles. per ton. Diesel fuel added 8.5% to RUB 73.75 thousand. per ton.

Such prices exclude oil workers from receiving a fuel damper in September, through which the government compensates companies for part of the difference between export fuel prices and indicative domestic prices (56.9 thousand rubles per ton of AI-92 gasoline and 53.85 thousand rubles for ton of diesel fuel). In September, market participants could receive almost 100 billion rubles. But the subsidy is paid only if real exchange prices for fuel exceed indicative prices by no more than 10% for gasoline and 20% for diesel fuel. Now they are higher by 23.8% and 37%, respectively.

Thus, the government continues to consider various options for limiting the export of petroleum products without making final decisions. In the last month and a half, there has been active discussion about the introduction of a list of special fuel exporters to combat gray exports – a situation when fuel is exported from the domestic market for which a damper has already been paid. The decree introducing the list has already been approved by the government, but has not yet been signed by the president, and the list itself has not been agreed upon. It is unclear to what extent curbing exports would in principle be an effective means of reducing prices, especially in the case of gasoline, since there are already signs of physical shortages in the market.

The key reasons for the price increase, which has been going on for several months and intensified in September, are a 50% reduction in the damper, as well as a decrease in production due to the peak of repairs at oil refineries. Last week, President Vladimir Putin noted at the WEF that, in addition to halving subsidies to oil workers, the government did not respond in time to the increase in global oil prices (as of September 15 – $94.2 per barrel Brent), but in general, producers and authorities agreed .

The Ministry of Energy expected the situation to stabilize after the planned repairs of the Astrakhan Gas Processing Plant (part of Gazprom Pererabotka) were completed. The company reported that in September it will supply the market with 45 thousand tons of gasoline and 40 thousand tons of diesel fuel.

Managing partner of Petroleum Trading Maxim Dyachenko calculated that the export alternative is now about 120 thousand rubles. per ton of diesel fuel with a domestic price of 73.3 thousand per ton, a damper of 20 thousand per ton and a duty of 23.75 thousand per ton. If a protective duty is adopted, the expert explains, prices on the domestic market may stop growing at such a pace: “But gas stations will continue to incur losses, and their prices will not fall.”

Olga Mordyushenko