At the beginning of October, the railway market met a so-called sensation with little enthusiasm: Russian Railways (RZD) solemnly announced the approval of discounts for the transportation of petroleum products. The media picked up the news without delving into the details. However, as is often the case with bold statements, the devil turned out to be not just in the details, but in already familiar, to put it mildly, protocols.
"What I want to emphasize regarding the 50% discount on petroleum product transportation is that, in fact, we are discussing the extension of individual (station) discount coefficients... In other words, nothing has changed for shippers: they haven't been introduced, but the previous conditions have been prolonged," commented a source from a major oil and gas company to Vgudok, without unnecessary enthusiasm.
To substantiate this claim, our interlocutor provided the editorial team with a pile of very interesting documents. The essence is as follows: Protocol No. 74 of RZD's Board of Directors dated September 18, 2025, does not introduce any new benefits. It merely shifts the expiration date of individual discount coefficients (IDC) — those station discounts that can reach up to 50% off the base tariff. Previously, these conditions, established by Protocol No. 48 from 2016 and confirmed in 2020 (No. 66), were valid until the end of 2025. Now they have been extended until December 31, 2026.
Additionally, the coefficient of 0.95 (a 5% discount) for the empty travel of tank cars after petroleum product transportation was prolonged as well. At first glance, this seems to be stability. Upon further inspection, it’s a delay of the inevitable.
To understand why shippers aren't lining up for champagne, it's enough to look at the dynamics of RZD's base tariff. According to analytical data, from December 2016 to June 2025, while the overall inflation in the country was around 171%, railway tariffs increased by a staggering 208%.
"This is our main pain point. A 50% discount at the station does help. But when the base price that this discount is based on has risen twice as fast as inflation, in absolute terms, we are still paying more than we did before the introduction of IDC in 2016. This is not a gift; it is a delay in the decline of margins," admits an employee of one of the oil refineries in central Russia.
In some ways, this extension looks like a classic palliative — a small relief under conditions of long-term systemic pressure. In other words, the monopoly uses discounts as a tool for control and balancing of cargo flows, rather than as an element of fair competitive struggle.
Hidden within the IDC system are extremely specific, almost manual mechanisms, demonstrating how RZD interacts with major players.
One of the most well-known examples cited in the appendices to the protocols is the coefficient of 0.579 for the empty travel of tank cars after transporting gas condensate, particularly on the Luzhskaya — Limbei route. Essentially, this represents a discount of nearly 42% on a non-revenue trip.
However, experts are confident that such coefficients have nothing to do with market logic. They are the result of individual agreements with the largest shippers. They guarantee volume; RZD guarantees price. The extension of these conditions until 2026 only reinforces that this gentleman’s compromise is currently more important than a transparent and unified tariff system.
The prolongation of these "special" conditions provides companies with predictability, which is critically important for planning exports and supplying the domestic market. Without IDC, analysts estimate, 15–20% of petroleum product volumes could have shifted to road transport or pipelines, which would have been catastrophic for RZD's freight base.
However, this system also has its dark side. First, the market continues to demand a transparent methodology for calculating IDC. What is the basis for deciding on a 50% discount for a specific route? Is it based on political compromise, infrastructure congestion, or historical volume? There are no clear answers. This creates imbalances: cargo flows concentrate at points with lower tariffs, overloading some sections of the network while leaving others underutilized.
Secondly, questions about mutual responsibility arise. RZD actively promotes mechanisms like "carry or pay,” demanding discipline from shippers under the threat of fines for non-delivery of cargo. However, shippers justifiably ask a counter-question:
"What if the railway does not accept the wagons on time? Who will compensate for our downtime and additional expenses?” poses a rhetorical question from a transport company representative. “The protocols demand discipline from us, but compensation from RZD for schedule disruptions often remains vague. The discount is nice, but it doesn't replace a clear mechanism for calculating damages."
In fact, the extension of IDC allows RZD to maintain its current business model — high base tariffs that are offset by selective discounts for key partners.
This grants the monopoly maneuvering space, while giving oil companies the illusion of control over costs.
The year 2026 will be a test for this tariff policy. The extension until December 2026 is merely a delay. Without a systemic review of tariffs that outpaces inflation, and without greater transparency in the calculation of IDC, the market will continue to operate in a state of endless "patchwork."
"We were waiting for reforms, but all we got was a piece of paper with a new date," summarizes an oil trading source for the editorial team. "It’s good that it hasn’t worsened. But this isn’t progress. This is simply stability in an era of tariff insanity."
However, not all industry participants share such skepticism.
The maintenance of discounts may be largely tied to the current crisis in the fuel market. According to Rosstat, as of September 29, 2025, the accumulated increase in gasoline prices since the beginning of the year has reached 9.2%, more than double the inflation rate (4.3%), noted Sergey Tereshkin, General Director of Open Oil Market, to Vgudok.
"In conditions where unscheduled repairs at oil refineries coincide with export bans and cuts in damping subsidies, it is prudent to seek cost savings where possible. Rail transportation of petroleum products became that 'where.' Overall, regulation of the fuel industry is always a compromise, and easing measures are an integral part of it."
As a final note, it is essential to mention that the topic discussed is quite complex. We hope we have managed to navigate through it; however, we remain open to new opinions and comments, which you are welcome to share with us through all available channels.
Source: Vgudok
