The Ministry of Energy will prepare criteria for lifting restrictions on the export of petroleum products
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At a meeting on October 4, Deputy Prime Minister Alexander Novak did not make a decision to ease the ban on the export of petroleum products. However, as Kommersant’s sources note, the Ministry of Energy will be tasked with developing criteria for the gradual lifting of restrictions. Kommersant’s interlocutors believe that some steps in this direction may be announced this week. The Ministry of Energy officially confirmed that the issue of lifting the export embargo is being discussed, but there is no decision yet. Mr. Novak, meanwhile, publicly focused on the fact that the embargo made it possible to reduce wholesale fuel prices.
At a meeting with Deputy Prime Minister for Fuel and Energy Complex Alexander Novak with the participation of oil companies on October 4, no decision was made to liberalize the ban on fuel exports, Kommersant’s interlocutors familiar with its progress told. However, according to Kommersant, the Ministry of Energy will be tasked with developing criteria for lifting export restrictions. The day before, Kommersant reported, that the government is discussing easing the ban on diesel fuel exports due to the overflow of Transneft storage facilities and the inability to redirect these volumes to the domestic market. Kommersant’s interlocutors in the industry say that several more meetings on this issue should be held this week. They believe that a decision on a partial lifting of the export ban will be announced in the coming days.
On October 4, the head of the Ministry of Energy Nikolai Shulginov confirmed that the topic of easing the export ban “is still under discussion at all levels.”
Nikolay Shulginovhead of the Ministry of Energy, on the situation with diesel fuel exports, October 4:
“If these problems were unsolvable, then we would probably have already seen the unloading of the refineries. We don’t see any unloading of the refineries yet.”
“Therefore, all current problems that arise are being resolved. We are thinking about what to do next. The decisions will be published soon,” the minister said. The Deputy Prime Minister did not have a detailed discussion of lifting the export ban at the meeting, Kommersant’s interlocutors note. The Ministry of Energy did not respond to Kommersant’s request.
According to Kommersant’s sources, at the meeting they discussed how the reduction in fuel prices at the wholesale level is translated into prices at small wholesale and retail.
Regulators are tasked with monitoring this issue. The supply of fuel to farmers was also discussed. The key issue with which the easing of export restrictions is linked—damper adjustment—was not the topic of the meeting. One of Kommersant’s interlocutors clarifies that representatives of the Ministry of Finance were not present.
Mr. Novak said on October 4 that the ban on the export of petroleum products is achieving its goal and prices on the domestic market are declining. “Our reserves increased by about 430 thousand tons during this period. We saw the stabilization of prices for petroleum products on the exchange; the decrease in exchange prices ranged from 16% to 20%. What is important is that this decrease was transmitted to small wholesale bases, to oil depots, from where suppliers, for example agricultural producers, take their goods,” the Deputy Prime Minister said on air “Russia 24”.
Meanwhile, on October 4, following reports of a partial lifting of the export ban, the cost of fuel at St. Petersburg International Trading Exchange resumed growth after a sharp drop in the previous days.
Thus, gasoline AI-95 and AI-92 rose in price by 1.3% and 0.8%, to 58.6 thousand and 56.3 thousand rubles. per ton, diesel fuel – by 3.6%, to 57.3 thousand rubles. per ton. At the same time, the cost of interseasonal and winter diesel fuel decreased by 1.7% and 0.9%, to 64.3 thousand and 76.4 thousand rubles. per ton.
“There is a need to lift restrictions, especially if we are talking about the diesel fuel market,” says Sergei Kondratyev from the Institute of Energy and Finance. “In recent months, 3.3–3.5 million tons were exported; such volumes are not needed on the domestic market ” He believes that the lifting of restrictions will be gradual: “A possible export permit for refineries connected to the Transneft product pipeline system looks logical from the point of view of controlling export shipments.” Perhaps the Ministry of Energy and market participants will agree on control of export transportation by rail and permission to transship fuel in certain ports, the expert believes. Similar mechanisms can be launched for the gasoline market, but, he continues, “here both the government and refineries have a greater margin of safety – the share of exports is smaller, storage facilities are not yet full, and there is still an opportunity to discuss export regulation schemes.”
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