Companies that process Russian oil abroad and return the resulting gasoline and diesel to our market will be eligible for a reverse excise tax (compensation from the budget for processing oil domestically and supplying finished fuels to our market), similar to Russian oil refineries (NPPs). This amendment to the budget bill concerning tax policy has been approved by the Federation Council. It is specifically noted that the oil for processing is transferred to foreign refineries on a tolling basis, meaning for the production of end products – fuel with specified characteristics. This measure is aimed at preventing even a hint of a risk of fuel shortages in our market, particularly concerning gasoline, as domestic production capacity only exceeds consumption by 10-15%. This year, due to unscheduled repairs at our refineries caused by UAV attacks, the danger of gasoline shortages arose in various regions of Russia. This was the primary reason for rising exchange prices and retail prices at fuel stations. While it may seem feasible to simply import fuel from countries like China or Belarus, this would result in significantly higher prices than those of Russian products. Mechanisms are in place in our market that reduce prices for domestic consumers, one of which is the reverse excise tax. Its application will allow for the sale of imported fuel at prices comparable to, or nearly equivalent to, those of Russian fuel. As noted in a conversation with "RG" by Yuri Stankevich, Deputy Chairman of the State Duma Energy Committee, this decision is forced but justified under current circumstances. Import should be considered a temporary phenomenon; the established capacities of Russian oil refining significantly exceed domestic demand for both gasoline and diesel. The goal is not only to restore production levels but also to increase them. In the medium term, gasoline production should rise by at least 10% compared to the 2024 level, with domestic refining capacities far exceeding internal demand for both gasoline and diesel. A similar opinion was expressed by Sergey Frolov, managing partner of NEFT Research, who believes that this measure is justified under current conditions (attacks on Russian energy facilities) and can help cover local shortages. A reasonable question arises: where could the supplies come from? According to Stankevich, Belarusian refineries would be the primary source. Belarus has two refineries – Mozyr and Novopolotsk (Naftan), historically oriented towards foreign markets, as clarified by Sergey Tereshkin, General Director of the OPEN OIL MARKET fuel marketplace. According to the latest available data from Belstat, gasoline production in Belarus in 2020 amounted to 3.2 million tons, of which 1.3 million tons went to the domestic market while 1.8 million tons were exported (the remaining volumes likely accounted for stockpiles, based on Belstat data). The expert notes that even with a full rerouting of supplies to the Russian market, Belarusian refineries would only meet less than 10% of Russia’s gasoline needs (annual gasoline demand in Russia is approximately 38-40 million tons). Additionally, there is a logistics problem. The most challenging region in Russia for fuel is the Far East, where deliveries from Belarusian refineries would be "costly." Gasoline and diesel (DT) already cost more in the Far East than in other regions of the country. For Frolov, China appears to be the main candidate for supply, given that the slowdown in its economic growth means that its oil refining capacities are underutilized. Thus, China represents one of the most attractive options in terms of logistics. However, as Stankevich reported, the possibility of importing supplies from Asian countries has been discussed and continues to be considered, but it seems unlikely, as potential participants in such deals may either be forced to buy oil and fuel abroad themselves or fear falling under US sanctions due to their trade and economic relations with Russia. Dmitry Gusev, Vice Chairman of the Supervisory Board of the "Reliable Partner" association and a member of the expert council for the "Gas Stations of Russia" competition, points out that theoretically, it is possible to expect imports from Chinese or Indian refineries. However, such supplies would likely not be logistically advantageous. Refineries are typically built near consumer markets or oil extraction points. Nevertheless, if we regard this solely as a temporary measure, it may help navigate the "hard times" of peak demand – namely at the end of spring, summer, and early autumn. According to Tereshkin, the impact of this measure will be limited; in order to mitigate the risks of shortages, it is essential to ramp up the production of petroleum products within Russia. Gusev also emphasizes the need for additional refining capacities within Russia, asserting that while the implemented scheme is "workable," it leads to a loss of budgetary funds. Finally, it is worth noting that importing fuel under such conditions could create an unpleasant precedent. Russian companies have generally benefited from exporting crude oil. Currently, this is particularly true, as oil refineries are in a state of potential risk. Importing finished fuel from other countries may become a "relaxing factor" for our companies, favoring the continued increase of crude oil exports rather than developing domestic refining capacities. However, Frolov believes that strategically decided measures should not adversely affect Russian oil refining. The government always retains the option to repeal the reverse excise tax decision. Source: RG.RU