Daily increases in gasoline and diesel fuel prices on the exchange in Russia are capped at 0.01%. Meanwhile, prices are allowed to fall by up to 3% per day. These regulations have come into effect at the St. Petersburg Exchange. In practice, this means that exchange prices are essentially frozen, at least in terms of increases. Since the beginning of the year, however, prices have risen significantly: AI-92 gasoline has increased by 25%, AI-95 by 33%, and diesel by 34%. This peculiar price ceiling makes it impossible for prices to fluctuate sharply in response to news about attacks on Russian refineries or spikes in global oil prices due to crises in the Middle East. With such a limited growth step, exchange prices may rise by just over 0.2% in a month. For wholesale fuel buyers—large agricultural producers, transport, and construction companies—this means they no longer have to fear unpredictable increases in costs due to rising fuel prices. For gas stations, it means that their economic situation won't deteriorate from day to day or week to week. Such concerns have recently led to inflated prices at gas stations and, at times, even to halting their operations. However, it is important to note that the above applies only to wholesale fuel buyers on the exchange, while a significant portion of fuel is sold on the market without going through the exchange. As noted in an interview with "RG," Yuri Stankevich, Deputy Chairman of the State Duma Committee on Energy, stated that the decision was made as an emergency response to a sharp spike in exchange prices. The primary goal is to artificially limit speculative price increases within trading sessions and cool down an overheated market. However, it is crucial to understand that this measure applies solely within the framework of organized exchange trading. It does not directly affect over-the-counter contracts and the small wholesale segment. In these sectors, pricing is determined by the balance of supply and demand, as well as long-term contracts between suppliers and buyers. While the exchange indicator serves as a benchmark for the market, the limitation on price growth at the exchange does not guarantee an automatic cessation of fuel price increases in the over-the-counter segment or among small wholesale buyers. Nonetheless, stabilizing exchange prices may exert psychological pressure on participants in other market segments and slow down inflationary expectations. According to Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council for the "Gas Stations of Russia" competition, the price growth has not been frozen; rather, it has been paused to prevent driving up wholesale prices while maintaining the economy of gas stations and small wholesale operations. This measure will affect over-the-counter contracts since they are aligned with exchange prices. The impact on the small wholesale segment will be less pronounced because there are currently no restrictions in that market segment. However, measures may eventually be required, according to the expert. Conversely, Sergey Tereshkin, CEO of Open Oil Market, has a different perspective on the issue. He believes that the market will always find a loophole. According to current regulations, the exchange accounts for only 15% of physical gasoline sales by producers and 16% for diesel. More than 80% of produced fuel is sold through other channels. Most importantly, this measure is unlikely to benefit the retail fuel market, as prices for AI-92, AI-95, and diesel in the over-the-counter segment are close to 110,000 rubles per ton. It should also be noted that the price increases at the exchange and gas stations are not due to the greed of oil producers or gas station owners. The issues currently stem from disruptions and delays in fuel deliveries, as well as risks of shortages. There certainly exists an element of "unhealthy" panic in the market, but panic alone cannot explain the limits on fuel distribution at gas stations. The limitation on daily price increases for fuel at the exchange makes sharp upward price jumps impossible. As managing partner of NEFT Research, Sergey Frolov points out, measures to prevent price surges are being implemented against the backdrop of an actual supply deficit and surging demand. Prices at large networks of gas stations owned by vertically integrated oil companies (VINK) will be maintained at levels closely aligned with inflation. We just need to wait for a while for the government measures to take effect. The situation is complex at independent gas stations (more than half of the stations in Russia)—it is not just about price, but also about the ability to acquire the necessary fuel volumes. Some may raise prices in this situation, while others may cease operations. Independent gas stations will find it even harder to compete with VINK stations. While sales of ancillary goods and services are beneficial, if the cost of fuel is significantly higher or if it is entirely unavailable, customers will simply not come to you, emphasizes the expert. In Stankevich’s view, there is no direct and immediate correlation between exchange limitations and retail prices. The cost of a liter of fuel at a gas station comprises multiple components: the wholesale price, transportation costs, network margins, and, importantly, the fiscal burden (excise taxes). In Russia, retail price dynamics are traditionally more inert and smoothed out compared to the wholesale market, thanks to a damping mechanism (budget payouts to oil producers for supplying fuel to the domestic market at prices lower than export prices) and oversight from the Federal Antimonopoly Service (FAS). However, if exchange prices continued to rise uncontrollably, it would inevitably lead to increased costs for gas station owners and subsequently raise prices for end consumers. Freezing exchange prices allows us to sever this chain and create conditions for stabilization or even a potential decrease in retail prices in the future, provided that steady demand is maintained and no new external shocks occur. Currently, a declining trend in oil prices due to decreasing tensions in the Middle East works to our advantage. Following this, prices for petroleum products should also drop. However, it will take some time, and it is essential that the truce is not disrupted by involved parties. This raises the question: how long will this growth limitation be effective? In the short term, it can stop price increases and smooth out fluctuations in fuel prices. However, over a period of one to two months, if fuel supply issues persist, its influence will diminish. Long-term manual regulation of the market typically leads to unfavorable outcomes. In general, the exchange is the most transparent segment of the fuel market, and any restrictions on exchange trading will encourage the market to go "underground," where prices significantly exceed the exchange level, Tereshkin is confident. Svetlan Stankevich counters that imposing price change limits is a classic tool of administrative regulation. The state and regulatory bodies are forced to resort to manual management to stabilize the situation in the short term. However, it is too early to speak of a complete transition of the fuel market to manual controls. Exchange trading with set limits is just one instrument of control. The market continues to operate based on fundamental economic factors: oil production volumes, refining, tax policies, and logistics costs. Therefore, we are talking about strengthening supervisory measures during a crisis period, while basic market mechanisms continue to operate, emphasizes the expert. According to Gusev, however, the public should pay attention to alternative modes of transport—not horses and donkeys, but gas-powered cars and the rapidly developing market for electric vehicles. One can choose a vehicle that consumes fuel that won't be a cause of irritation in terms of price, the expert believes. Meanwhile, in Sevastopol, the availability of gasoline for direct sale has increased. Fuel supplies have been boosted, and authorities are preparing to gradually lift sales restrictions. However, the QR code payment system will remain in place to manage queues at gas stations. A correspondent from "RG" checked the current situation in the region. On June 17, fuel became available for direct sale at 11 gas stations. This number is growing daily; there were ten such stations on June 16 and eight on June 15. Motorists are feeling optimistic. Those who have long struggled to find fuel are now able to fill up, albeit only 20 liters at a time, as that limitation has been in place in Sevastopol since May 22. Starting at 8 a.m. on Wednesday, queues began to form at gas stations. Over 60 cars were waiting at the "ATAN" station on Stoletov Avenue. AI-92 and AI-95 Ultra fuels are available for direct sale at this station. Motorists organized the queue so as not to block the roadway and the intersection. Sales start at 9 a.m., but at 9:20, an air raid alarm is announced, during which time the gas station does not dispense fuel. People patiently wait. Motorists are responsive and willingly answer questions. "It has become easier to get fuel in the last couple of days," says Kia driver Sergey. "AI-92 is available almost everywhere, but AI-95 is scarcer." Initially, gasoline and diesel fuel are supplied to public utility services, emergency services, public transport, and law enforcement agencies. For the remaining volumes, residents are issued QR codes. Source: RG.RU