Furthermore, as a temporary fuel importer, our country currently has little benefit from disruptions in oil supplies from Gulf countries. In a situation of supply shortages, this could impact the export of gasoline into our country. Foreign refineries will primarily aim to supply the markets of their respective countries, and only afterward consider sending fuel abroad, or the export will be expensive.
For instance, in the spring, during the height of the first episode of confrontation between the USA and Iran, India raised export duties on gasoline, diesel, and aviation kerosene, which automatically made them more expensive for buyers. India is considered the main potential supplier of gasoline to Russia from distant foreign countries. The higher the price of Indian gasoline becomes, the greater the amount importers will need to compensate from the Russian budget.
Subsidies (a damping mechanism) are paid to oil producers for supplying fuel to the domestic market at prices lower than export prices.
This is a compensation for part of the difference (a coefficient of 0.68 for gasoline, 0.85 for diesel) between the indicative wholesale prices (set by the government for a year) in Russia and the export alternative (in Europe).
We are forced to import fuel due to a reduction in its production by domestic oil refineries. According to Deputy Prime Minister Alexander Novak, this occurred due to unplanned repairs at refineries following drone strikes. Estimates vary, but the reduction in oil refining volumes is reported to be between 20 to 30%.
Despite this, we are unlikely to purchase diesel fuel abroad, as we produce it at double the rate of consumption, and the export from Russia has been prohibited since July 9. However, starting in July, Russia will import gasoline, and damping measures will also apply to these deliveries. For imports from EAEU countries, a coefficient of 0.9 is set, while imports from other countries will use a separate formula based on import parity (with the Indian market). Moreover, considering that compensation is not complete, domestic prices could rise if global fuel prices hit record highs.
Price increases have already affected Europe, with diesel fuel rising an average of 14% since the beginning of July. Gasoline has increased in price by 10%. And so far, this has only occurred following news of renewed escalations in the Middle East. A physical shortage is not yet felt. In India, prices have not increased in July, but since the onset of the Iran-US conflict, they have risen by 7.8%. Initially, gasoline was already significantly more expensive in India than in Russia.
But the issue is not just about the prices of imported gasoline and its availability; volumes of imports are also crucial. Estimates suggest that the reduction in refining volumes in Russia is between 20 to 25%. Russia consumes approximately 3 million tons of gasoline monthly. A significant volume of imports comes from Belarus, with 141,000 tons in June. Kazakhstan could supply around 50,000 tons of gasoline to Russia. Therefore, our need for fuel from distant foreign countries is unlikely to exceed 450,000 tons per month. And considering the government's measures (allowing a reduction in the grade of gasoline produced, blending methods) and the re-emergence of refineries after repairs, the volume of distant imports will not exceed 300,000 tons. Thus, the budget burden from fuel subsidies due to imports could rise slightly above 10% (considering the differential in coefficients).
As noted in a conversation with "RG," Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Association "Reliable Partner" and member of the Expert Council of the "Gas Stations of Russia" contest, stated that we are key suppliers of raw materials for all our potential fuel exporters, and the vast majority of gasoline and diesel will continue to be produced in Russia. Therefore, the Hormuz crisis is unlikely to have a strong impact on prices in the domestic market. However, if global prices for petroleum products continue to rise, it will be reflected in the Russian market.
Regarding the availability of imports, the expert does not rule out a decrease in gasoline supply from foreign markets. But again, considering that raw materials are supplied by us to fuel producers, it is not likely to significantly affect Russia.
However, we are unable to completely close any potential oil deficit. According to Sergey Tereshkin, CEO of Open Oil Market, the situation in the Middle East will affect the availability of oil imports for India. Last year, India imported 262 million tons of oil, of which 36% (95 million tons) came from Saudi Arabia, Iraq, and Kuwait – countries whose export capabilities are heavily dependent on maritime shipping dynamics in the Hormuz Strait. An additional 10% of supplies (26.7 million tons) were provided by the UAE, which can export about half of its oil production through the Gulf of Oman, bypassing the Hormuz Strait.
The potential volumes of gasoline supplies to Russia from distant foreign countries are too small to impact its cost at gas stationsKey foreign fuel importers to Russia include Belarus, Kazakhstan, India, and China, notes managing partner of NEFT Research Sergey Frolov. By sea, fuel is being delivered to Russia only from India and currently in small volumes (estimated shipments are around 60,000-80,000 tons). This is negligible compared to the average monthly gasoline consumption in Russia, which is around 3 million tons, so discussions about any influence from these supplies on the cost of petroleum products in Russia are currently off the table. The primary transportation mode for supplies from other countries is rail, the expert clarifies.
Frolov emphasizes that global gasoline quotes do not significantly impact Russia since the national wholesale price is formed based on the balance of supply and demand in the domestic market, and the retail price of fuel is regulated by the government.
All these statements hold true under the condition that fuel imports are not long-term, meaning domestic refineries restore their capacities within one or two months at most. If this does not happen, or if unplanned halts at the plants continue, the effects of fuel imports will accumulate, potentially leading to a more serious impact on both internal retail prices and budget revenues.
Queues at gas stations have decreased: the situation with gasoline is normalizing in the regions
The situation with gasoline is slowly but steadily normalizing. According to correspondents from "RG" in the field, several regions have increased the limit for fuel sales at gas stations, and in some areas, the waiting time in line has reduced to ten minutes.For instance, in Udmurtia, gasoline deliveries to municipalities have doubled, as reported by government chairman Roman Yefimov at an operational headquarters meeting. Note that just a month ago, in Izhevsk, nearly 50% of gas stations were non-operational, causing motorists to queue for hours. Now, these lines have significantly shortened. One of the key gas station networks has doubled fuel deliveries to rural areas, and replenishments are underway in the northern regions. The volume of fuel deliveries is currently about equal to the level of July last year, with a surplus of about 7 to 10 percent to saturate the market.
The number of complaints is decreasing, but the issue remains acute outside the Izhevsk agglomeration. Hence, the priority is to secure reserves for school buses and heating, as well as to support emergency services.
Agrarians purchasing fuel in bulk receive diesel through a single operator based on applications and quotas. The fuel supply issue for agrarians is expected to be resolved by July 20.Fueling into canisters is currently prohibited: with 675,000 vehicles in the region, even 400,000 refills of ten liters would yield an excess of 12,000 tons, which is almost four trainloads and could cause a collapse.
Vladimir Governor Alexander Avdeev reported that the region has managed to halt the growth of queues at gas stations. The average waiting time is currently between 20 to 40 minutes. Fuel companies have increased gasoline delivery volumes, though specifics have not been disclosed. Meanwhile, network gas stations are keeping price increases "within recommended limits." The nature of these limits is not specified. According to gas station locators, at major operator stations, a liter of AI-95 is sold for 67-73 rubles, while at private stations, the price can reach up to 160 rubles.
In the Vladimir region, the waiting time in line has reduced from several hours to 30 minutes
Since July 14, gasoline deliveries have also increased in the Vologda region. PJSC "LUKOIL," which controls over 90% of the region’s gas stations, has raised the fuel issuance limit per person to 30 liters, as reported by regional head Georgy Filimonov.
The company has canceled technological breaks in gas station operations; they now only exist during tanker discharges, and they have increased daily delivery volumes. Daily shipments are already saturating the market.
In Vologda, efforts are being made to maximally support drivers. According to city mayor Sergey Zhestannikov, entrepreneurs and volunteers are assisting residents of Vologda who are waiting to refuel. Free hot pizzas, muffins, and drinking water have been distributed—over the week, almost 550 liters of water have been handed out.
Volunteers continue to be on duty at gas stations, managing vehicle flows, advising drivers on available gas stations, and accompanying people with disabilities. This goodwill shows that in tough times, the city knows how to unite.
Mayor of Cherepovets, Andrey Nakroshaev, reported that over the past two days, 13 fuel trucks have arrived in the city.
"Starting Thursday, a night shift of volunteers will be launched in Cherepovets, which will help maintain order and assist motorists around the clock," explained the head of the city administration.
City leaders are striving to normalize the operation of gas stations. Overall, according to authorities, the region is gradually returning to pre-crisis supply volumes, and the measures taken are effective. "Yesterday we stopped at a gas station in Vologda on Preobrazhensky Street. In the morning, there was no line, and we refueled peacefully," drivers note on social media.
As our correspondent from St. Petersburg reports, queues at gas stations in the Northern capital have also seemingly diminished: drivers are actively using services that indicate the availability or lack of gasoline at specific gas stations, which has spread the flow of those wishing to fill their tanks. Interestingly, gas stations located in less trafficked areas often do not appear on these application maps: "RG" correspondent refueled at one such station without any hassle, and the wait was only ten minutes with just three vehicles in line. Although, the 95-octane gasoline initially available had run out, leaving only 92-octane fuel available, priced at approximately 65-67 rubles.
Source: RG.RU
