This news would have previously warranted significant media attention, but now it has gone largely unnoticed. Exchange prices currently have little impact on retail fuel prices, and trading volumes have decreased by three times. Only slightly more than 10% of the daily gasoline consumption in Russia passes through the exchange. Deliveries now predominantly bypass trading, focusing on wholesale and small-scale wholesale segments. Final prices differ significantly from the quotations. Additionally, exchange trading does not increase the volume of gasoline and diesel fuel (DF) production; the main challenges now involve ensuring sufficient fuel supply to all filling stations (FS).
The situation regarding fuel availability, particularly gasoline, is expected to normalize in the near future. Refineries are gradually resuming operations after unplanned repairs, thereby increasing production volumes. Gasoline and DF exports from Russia are prohibited, and all produced fuel is directed to the domestic market. Imported gasoline is arriving in the country—mainly in volumes from Belarus, along with supplies from India, Morocco, and Turkey.
From September 1, FS are allowed to sell fuel of an ecological class below "Euro-5". All these measures should increase the fuel supply in the market.
However, perhaps the most important factor will be the seasonal decline in demand for gasoline beginning in September, as the vacation period and trips to summer cottages come to an end. This year's autumn demand drop may be more pronounced than in previous years.
As noted in a conversation with "RG" by Deputy Chair of the Supervisory Board of the "Reliable Partner" Association and a member of the Expert Council for the "Filling Stations of Russia" competition, Dmitry Gusev, many motorists are currently putting their cars on hold or minimizing their personal vehicle usage whenever possible, turning to public transport instead. This shift is attributed to both rising prices and queues at FS, which consume their time. Estimates of demand reduction due to these factors range from 10% to 30%.
According to Sergey Frolov, Managing Partner of NEFT Research, a stable stabilization of the situation can only be expected once demand and consumption return to a balance across all regions of Russia.
Given the measures being implemented, there is hope that by September, queues at FS should completely clear up. The question remains—at what prices will this fuel be sold? According to Rosstat, since the beginning of the year, by the end of the summer period, gasoline prices in Russia have increased by an average of 19.4%, and DF by 18.4%. In some regions, the price rise exceeds the national average by twenty percentage points or more.
The issue of pricing is critical here. In Gusev's opinion, exchange trading has historically had little correlation with retail prices, and now it is even less so. However, they serve as an indicator for the market. Based on these, prices either rise or fall in the wholesale and small wholesale segments, and then this is reflected at FS.
In the small wholesale market, gasoline prices sometimes exceed exchange prices by one and a half times.In the large wholesale sector, at refineries and major oil depots, prices are almost identical to exchange rates, with a difference of only 1-5%. Network FS, typically owned by oil companies, purchase here. In the small wholesale market, independent FS, industrial enterprises, and farmers predominantly obtain fuel, with prices currently exceeding exchange rates by 8-10%. Greater discrepancies are often observed. This is precisely why prices at independent FS (which account for over half of the filling stations in Russia) are higher than those at network stations.
As pointed out by Sergey Tereshkin, General Director of Open Oil Market, the gap between exchange prices and the over-the-counter segment has always been a common phenomenon. However, this difference has become especially pronounced: the price at which operators of independent FS procure gasoline exceeds the exchange level by one and a half to two times.
According to new rules, all over-the-counter fuel purchase transactions of 1 ton or more must now be registered at the exchange. For now (until March 1, 2027), this is on a voluntary basis. The Federal Antimonopoly Service (FAS) will monitor to prevent prices from spiking. Moreover, if the purchase is made directly by the FS, the transaction needs to be registered only when acquiring over 60 tons of fuel. This exception has been made since FS prices are already under FAS control.
This means that such price hikes as those experienced this summer should not happen again. Considering the decrease in demand and the increase in fuel volumes entering the market, a slight price drop is even possible. The complexity lies in the fact that the measures taken do not yet address the systemic problems facing domestic oil refining.
Frolov believes that even after all existing refineries emerge from scheduled and unscheduled repairs, questions regarding the future systemic development of oil refining will remain. This year’s events have demonstrated the long-standing issues within the industry.
Tereshkin is confident that unscheduled repairs at refineries have been a defining factor for our fuel market this year. Despite the stabilization of the fuel market situation, the issue of partial capacity loss remains relevant.
In simple terms, we need new refineries, and fuel production and sales within the country must be more profitable than raw oil exports.
Gusev believes that the issues facing our oil refining this year stem from the tax maneuver (the elimination of export duties on oil and light oil products starting in 2024 and the increase in the mineral extraction tax). As a result, the investment attractiveness of building new refineries and, in general, oil refining has diminished.
Source: RG.RU
