End consumers include gas stations (ASCs), processing companies, and large firms with substantial owned vehicle fleets, such as transportation, mining, and agricultural enterprises.
Brokers, of which only a limited number are participants having membership status in the exchange's "Oil Products" section, will be permitted to conduct transactions on behalf of third parties. If a post-transaction review reveals an attempt to resell fuel acquired for "personal needs," that buyer's access to trading will be revoked. The same rule applies to brokers.
Additionally, starting July 1, the mandatory sales volume of gasoline on the exchange for oil refineries has been reduced from 15% to 10% of production volumes. A similar measure is currently under consideration for DT, reducing the requirement from 16% to 10%. This has been implemented to facilitate more direct transactions, bypassing intermediaries on the exchange. For example, a direct supply contract between an ASC and a refinery.
This decision has been made against the backdrop of fuel supply issues in various regions and a sharp rise in prices at ASCs. Earlier, Deputy Prime Minister Alexander Novak emphasized the need to refine the exchange trading system, ensuring that fuel reaches end consumers directly, eliminating intermediaries who inflate prices.
Transactions for third parties will again be permitted only through brokers who are limited to trading participants with exchange member status.Formally, everything appears logical: the fewer intermediaries (traders), the lower the pricing should be, as each adds their "interest" to the cost of each liter. The problem, however, is that the role of the exchange in our fuel market has diminished significantly this year. In July, oil product trading volumes more than halved compared to the same period last year. Meanwhile, fuel consumption in Russia has not decreased. This indicates that trading has shifted to different channels, with over-the-counter (OTC) sales essentially unregulated by the government. These can be direct from ASC to refinery or through traders.
As noted by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Stations of Russia" competition, currently the main price indicator in our fuel market is small wholesale transactions (outside the exchange), which have become the primary factor in driving prices up. This leads to a scenario where exchange prices are relatively low, large oil companies' ASCs maintain similar low prices, yet in small-scale wholesale, prices can reach 200,000 rubles per ton. In the current situation, clear and comprehensible mechanisms are needed instead of merely playing the market economy. A government regulation system for the fuel market, utilizing big data and artificial intelligence, is more efficient and less dependent on human factors and informational backgrounds. The exchange is heavily dependent on these factors, the expert emphasizes.
On the other hand, traders did not emerge out of nowhere. Firstly, they benefit from economies of scale. Many independent ASCs (over half of the gas stations in Russia), not owned by large oil companies, simply cannot afford to acquire their own fuel storage facilities, enter contracts with refineries, and manage transportation. This would impose an unbearable financial burden on them.
Energy expert Kirill Rodionov states that traders serve as traditional scapegoats in the market. Whenever there is talk of price increases, it is always their fault. In reality, traders are a natural part of any market, including the fuel market. They are the intermediaries who have the financial and logistical resources to purchase fuel on the exchange and subsequently resell it to ASCs. The effectiveness of utilizing traders depends on the volume of gasoline sales on the exchange. The higher the sales, the more fuel will be available to independent fuel retailers at reasonable prices. Currently, the issue lies in a lack of fuel supply on the market. Increasing supply on the exchange and attracting traders could help balance the market and reduce the significant disparity in prices among different ASCs, according to Rodionov.
Sergey Tereshkin, CEO of Open Oil Market, shares a similar view: the fuel market cannot function without traders. The role of traders is somewhat derivative of exchange norms: the higher the norms, the greater the role traders can play in stabilizing the market.
However, with current supply limitations, any increase in exchange norms seems unlikely for now. Furthermore, from the perspective of Sergey Kaufman, an analyst at the Finam Group, the reduction in fuel sales norms only indicates that even vertically integrated oil companies (VINKs), which control the entire production cycle— from oil extraction and refining to fuel sales at their ASCs—are struggling to meet all their standard obligations with gasoline. In such conditions, VINKs must send less fuel to the exchange to supply their own ASCs.
Kaufman believes that the limitations on sales norms and the new trading rules will not affect retail prices for gasoline and DT. The changes do not increase the total fuel availability in Russia but merely alter logistics slightly. In some cases, this may help expedite fuel delivery to end consumers. However, the primary issue at the St. Petersburg exchange remains a physical fuel deficiency. Trading volumes have significantly decreased, and prices are artificially constrained (with a step rule of 0.01%, which is the maximum permissible increase in quotes per day), rendering it often physically impossible to purchase needed fuel volumes. If oil refining is restored, the fuel market could quickly revert to normal, and retail prices for gasoline could decrease from the currently abnormal levels, the expert believes.
The current situation poses the greatest risks for independent ASCs, according to Tereshkin. Exchange trading will quickly recover once restrictions are lifted. The question is how the pool of end buyers will change with the exchange's fuel supply: not all independent ASCs, which lack direct access to fuel supplies, will survive this crisis.
Rodionov believes traders are also under threat, as some companies may disappear. The market and exchange trading will recover very quickly as soon as the limitations are lifted.
However, the date for this remains unknown. The restrictions on gasoline purchases by end consumers have been established indefinitely. Meanwhile, the sales norms for gasoline on the exchange have been reduced until September 30, although this measure may be extended if necessary.
Source: RG.RU
