Gas stations in the regions have begun receiving warnings from the Federal Anti-Monopoly Service (FAS) regarding unjustified price increases. The Ministry of Energy and regional anti-monopoly authorities have initiated inspections of fuel networks amid rising fuel prices and supply disruptions. The government is preparing additional measures, including a complete ban on the export of gasoline and diesel until the end of the year. Will increased monitoring stabilize the market situation, and what other measures is the state considering? This article from "Izvestia" explores the topic.
Inspections of networks amid rising fuel prices
The Ministry of Energy and regional offices of the FAS have begun sending requests to fuel network owners demanding justification for rising fuel prices. The authorities are also requesting information on fuel reserves and any disruptions in supplies. Market participants have informed "Izvestia" about this development. The editorial team has also reviewed two such letters.
"Regional authorities (FAS and the Ministry of Energy) have repeatedly contacted representatives of gas stations in recent weeks, requesting explanations for fuel price increases or information about their reserves," stated Pavel Bazhenov, president of the Independent Fuel Union (NTS), to "Izvestia."
In accordance with the instructions from the FAS, territorial authorities are monitoring compliance with anti-monopoly legislation in the fuel market by requesting data from gas stations about pricing and fuel availability, the agency's press service confirmed to "Izvestia."
Based on the analysis of the provided information, decisions are made regarding the presence or absence of signs of anti-monopoly violations, the agency clarified. For instance, warnings have been issued to gas station owners in the Tver and Tyumen regions, according to the FAS.
If the FAS deems the price increase economically unjustified, gas station owners may face administrative fines, orders to reduce prices, or even suspensions of operations in cases of systematic violations, noted Vladimir Chernov, an analyst at Freedom Finance Global. In more serious cases, anti-monopoly proceedings could be initiated if it is proven that the price increases were coordinated or artificial, he added.
"The actions of regulators are understandable given that some gas stations are forced to cease or limit gasoline dispensing or close down amid fuel shortages. Some gas stations indeed must raise prices above inflation due to market difficulties and rising wholesale prices. Not all fuel market operators have the buffer to maintain prices at a loss," Bazhenov emphasized to "Izvestia."
However, while small networks were experiencing fuel supply issues at the end of summer, the situation has now worsened even for larger systemically important ones with dozens of gas stations, he added. Regions such as Kirov, Nizhny Novgorod, and Kostroma, known for large companies in the sector, are now facing operational challenges.
"Izvestia" has sent inquiries to the Ministry of Energy, oil companies, and fuel networks.
Measures taken by the authorities
The authorities are striving to prevent retail gasoline prices from rising faster than the inflation rate or to keep these indicators close, as reported in "Izvestia." This mechanism is being implemented through regulatory pressure, primarily from the FAS, on oil companies. Such a system forces retail networks to hedge against losses from inevitable price disparities. Consequently, prices do not decrease even when there are all the prerequisites for that, according to the NTS.
"While large companies can afford to sell fuel at a loss for some time by compensating for losses through other activities (as well as through the sale of ancillary goods and services at gas stations), smaller operators are completely tied to wholesale prices and cannot lower prices below their levels. As a result, they raise prices at their stations faster than inflation rises," noted Valery Andrianov, an associate professor at the Financial University under the Government of the Russian Federation.
Since early September, wholesale fuel prices have reached historic highs. On September 3, the price of Ai-95 with delivery to the European part of Russia reached a record 82,300 rubles per ton, while Ai-92 exceeded 70,600 rubles. As of September 29, the price of Ai-95 decreased to 78,900 rubles per ton, and Ai-92 rose to 74,000 rubles, according to data from the St. Petersburg Exchange.
For those gas stations that kept price increases within the predicted inflation range in September, margins remain negative, noted Pavel Bazhenov from NTS. On average across the country, operators are facing approximately 4 rubles of loss on each liter of both Ai-92 and Ai-95 gasoline, he added. Meanwhile, some non-network gas stations in the regions have raised prices by about 10%, or by 5-8 rubles compared to network prices, as reported in September by the media. Instances of such price increases were noted in the Tambov, Tver, and Lipetsk regions.
The state of the fuel market
Russia has already faced similar problems, noted Dmitry Tortev, a member of the expert council of the State Duma's committee on competition protection. This year, as experts reported to "Izvestia," key causes of the crisis included increased domestic demand during the agricultural harvest period and vacation season, as well as planned and emergency repair works at oil refineries.
In 2023, the export ban was implemented at the end of September and lifted in the second half of November. The Ministry of Energy then noted that a surplus of fuel had been created in the domestic market over those two months, significantly reducing wholesale gasoline prices. In 2024, a ban was introduced in March, initially intended for six months. However, as the domestic market became saturated with automotive fuel from May 20 onward, the authorities suspended this restriction. The easing remained in place until the end of July, but was canceled in August as fuel consumption in Russia began to rise faster than expected, leading to a sharp increase in wholesale prices for fuel and an extension of the ban until the end of the year.
"A variety of factors have contributed to the current situation in the fuel market, and it is evident that the government is preparing new measures. In the medium term, regulators may begin discussions on a system of export restrictions as a permanent measure — for instance, if fuel prices at gas stations rise above inflation," proposed Dmitry Tortev.
Earlier, Deputy Prime Minister Alexander Novak held a meeting with representatives from the largest oil companies. He listened to their reports on the current situation, sources in the industry told "Izvestia." According to them, the outcome of the meeting was Novak's statement that the decision regarding the future of the domestic fuel market would be made by the country's political leadership. A few days after, it became known that the cabinet intended to implement a complete ban on gasoline exports for all participants, except for supplies under intergovernmental agreements, until the end of the year. There would also be a ban on diesel fuel exports for non-manufacturers until the end of the year. Currently, the ban is in effect until September 30, and thus, a new resolution is expected to be published in the coming days.
It is well understood that the decision to ban gasoline and diesel exports is a necessity, noted Yuri Stankevich, Deputy Chairman of the State Duma's energy committee.
"Mandatory restrictions on exports amidst sanctions will increase pressure on the financial indicators of the oil sector. According to projections, our major oil companies' profits for the year will be half of what they were in the previous period," the deputy noted.
Moreover, unscheduled repairs at oil refineries have led to risks of gasoline shortages in the domestic market, highlighted Sergey Tereshin, General Director of Open Oil Market. As a result, while earlier the export ban simply indicated the need to "hold back" price increases, it is currently used to fill the domestic market.
However, experts believe that the export ban won't provide a complete solution to the problem. The fact is that in the gasoline market, the surplus capacity rarely exceeded 15% in normal circumstances (compared to 50% in the diesel market), so saturating the domestic market will also require imports, they argue. This may include supplies from Belarusian oil refineries that faced surplus capacity after losing the European market.
To solve the issue in the short term, stabilizing the wholesale market through increased domestic supplies and expanded fuel sales through exchanges is necessary, Vladimir Chernov emphasized. Additionally, temporary reductions in excise taxes or subsidy mechanisms for independent gas stations, vulnerable to price fluctuations, should be considered, experts believe.
In the medium term, it is crucial to establish long-term direct contracts between oil refineries and networks, as well as create additional fuel reserves to smooth out local disruptions and strengthen the protection of gas stations, concluded the expert.
Source: Izvestia
