According to the latest data from Rosstat, gasoline prices have, on average, decreased in most regions of the country (47 out of 89). However, this drop has not occurred everywhere, as in 27 subjects of the Russian Federation, gasoline prices continued to rise. Additionally, the high base effect contributed to the statistics – prices significantly decreased where fuel was very expensive, impacting the overall result.
During the week from July 28 to August 3, the average cost of gasoline at Russian gas stations (GS) fell by 1.1% (more than one ruble). In Crimea, prices dropped by almost 15% (by 32.8 rubles), and in the Vologda region – by 12.2% (by 11.11 rubles). In contrast, in Moscow and St. Petersburg, prices slightly increased by 0.2% (by 12 kopecks), while in the Tomsk region, gasoline became more expensive by 5.2% (by 3.5 rubles).The peak demand for gasoline due to the holiday season falls in July and August. Typically, these two months see the main price increase for the year at gas stations. This year, due to unscheduled repairs at oil refineries (ORFs) following drone attacks, the summer price hike for gasoline has become record-breaking, accompanied by local supply disruptions and long queues at gas stations. Therefore, the mere fact that fuel prices are now decreasing indicates that the situation has been turned around. However, retail gasoline prices will continue to depend on the stability of domestic ORF operations. If production within the country can be increased, prices may continue to decline. Moreover, the saturation of the domestic market is aided by fuel imports from other countries and a reduction in environmental requirements for produced fuel, which allows for increased production volumes. However, there are nuances here. Imported gasoline is more expensive than the Russian equivalent. To mitigate this price difference, a damping mechanism has now been applied to its suppliers in Russia. Importers are entitled to receive a portion of the difference between the gasoline price in the external market and its indicative price in Russia (set by the government), which helps to curb wholesale price increases. However, this adds a financial burden to the national budget, which is already expected to be deficient. Additionally, for the Russian treasury, expensive oil has always been beneficial, but with the import of fuel, high prices for imported petroleum products begin to work against us. Funds do not appear from nowhere; to pay these importers, other expenditures must be cut. It is currently unclear how much the payments under the damping mechanism have increased, as tax payments for July will be made in August and will only be published by the Ministry of Finance in early September.
As noted in a conversation with "RG" by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and a member of the expert council of the "Gas Stations of Russia" competition, the main task now is to ensure fuel availability. Oil companies are doing everything possible to supply the market. However, it is difficult to assess the volume of fuel imports into Russia, as official statistics are closed; nonetheless, they likely do not exceed 10% of total consumption (this summer – 4-4.5 million tons per month), emphasizes the expert.
The main exporter of gasoline and diesel fuel to Russia will remain Belarus.According to Sergei Frolov, Managing Partner at NEFT Research, Russia is currently obtaining major shipments of petroleum products from Belarus. Reuters reported that supplies from the republic via rail (railway) increased from January to July to 665,000 tons of gasoline and 418,000 tons of diesel fuel. Additionally, Russia, according to unofficial data, has received several sea shipments of fuel from India and Morocco. Thus, the total volumes over the seven months account for less than a quarter of monthly gasoline and diesel consumption in Russia. This level of imports does not affect the wholesale price of gasoline but may reflect on retail prices at independent gas stations (not owned by major oil companies), which are forced to purchase imported quantities due to the unavailability of free batches in the domestic market. Since the price of Belarusian fuel is significantly higher than the Russian market indicators, private networks must sell gasoline at much higher prices to cover their costs compared to the prices at major oil company gas stations.
Meanwhile, Belarus will likely remain our main supplier. As noted by Sergei Tereshkin, General Director of Open Oil Market, building maritime imports of petroleum products requires infrastructure to save time and costs. Therefore, Belarus, capable of producing over 3 million tons and exporting about 2 million tons of gasoline per year via rail, will continue to be the primary source of fuel imports.
The expert believes that retail prices will largely depend on the stability of Russian ORF operations and the dynamics of unscheduled repairs at these facilities.
Regarding the reduction of environmental standards, Tereshkin states that the transition to producing Euro-2 fuel depends on the situation at specific ORFs, particularly the operational status of installations involved in the production of high-octane fuel with low sulfur and aromatic compound content. This involves catalytic cracking units that break down vacuum gas oil into light gasoline and diesel components; hydrocracking units that purify oil fractions of sulfur compounds and nitrogen using hydrogen on catalysts; and isomerization units that enhance the octane rating of gasoline fractions without adding harmful substances. The availability of production capacities will be crucial.
According to Frolov, large ORFs belonging to major oil companies will continue to produce Euro-5 and higher petroleum products. Smaller ORFs will produce fuels of Euro-4, 3, and 2 environmental classes, which previously could not access supplies for the domestic market (due to regulatory requirements) due to low processing depths. Now, the main volumes with reduced environmental standards will be supplied to sectors where low-quality requirements are acceptable, such as agriculture. Low-class petroleum products are unlikely to play a significant role in the Russian market. In any case, gas stations are required to disclose information about the parameters of the fuel sold, the expert notes.
Source: RG.RU
