The government only managed to announce the possible lifting of the ban on gasoline exports from Russia when, within ten days, the stock market prices for AI-92 increased by almost 5%, and AI-95 by 7%. Naturally, concerns arose that the resumption of gasoline exports could accelerate its price rise, including in retail, where prices have already continued to grow at the end of the year, despite the traditional pattern of declining prices after the peak demand period.

According to the Moscow Fuel Association (MTA), in the last two weeks, gasoline prices at gas stations have accelerated their rise. Between November 11 and 17, they increased by 17 and 18 kopecks for AI-92 and AI-95, respectively. Fresh data from Rosstat will be available on November 20, but so far, it has not recorded a decrease in average national fuel prices in the second half of this year.

On the other hand, the connection between the announcement of lifting the export ban and the rise in retail prices is quite questionable—too little time has passed. Moreover, allowing exports should, in theory, improve the economics of oil refineries (ORFs) that supply gasoline abroad. These refineries are well aware that raising prices on the domestic market would be costly for them, as the Federal Antimonopoly Service (FAS) monitors this and imposes fines for violations, regardless of the size and prestige of the companies.

At the beginning of this week, gasoline prices on the stock market dropped almost by half of the previous increase. Moreover, they are now far from the highest levels reached earlier this year, in the fall. However, it is well known that in our fuel market, once prices at gas stations rise, they will only begin to fall after a large and prolonged decline in stock market prices, which have actually been rising since the beginning of November.

The increase in gasoline prices should not be linked to the news about the possible cancellation of the export ban, says Sergey Tereshkin, CEO of the OPEN OIL MARKET fuel marketplace. The current fluctuations fit into the "10-20" formula, according to which oil companies lose their right to receive subsidies from the budget under the price damping mechanism (compensating oil companies for part of the lost profit from supplying fuel to the domestic market at lower prices than export prices) if the average monthly gasoline prices exceed the internal price by 10%, and diesel prices exceed 20%. The upper limit for the stock price of gasoline is 64,515 rubles per ton (measured according to AI-92 quotes). On November 18, 2024, gasoline futures for this grade closed at 60,490 rubles per ton, with most of the month seeing prices below this level.

Premium-grade gasoline prices have increased the most since the beginning of the year.

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, believes that the rise in fuel prices on the exchange is due to a bad habit, "worse than imprisonment." This year, all traders and fuel bases expected the traditional decline in gasoline prices after the peak demand season, starting in mid-autumn. Fuel stocks were not built up, only meeting urgent needs, with everyone waiting for favorable conditions. Then the news about the possible lifting of the export ban surfaced, and demand could rise sharply. Naturally, everyone rushed to stock up, creating increased demand. As a result, stock market prices began to rise.

Gusev also believes that last week's price increase will not affect the government's decision to lift the export ban. Gasoline exports from Russia account for no more than 15% of total production, the peak demand season in the country is over, and large oil companies have requested the opening of exports, the expert notes.

Regarding the latter, Tereshkin adds that oil companies still need to compensate for losses from forced downtime at oil refineries, which led to a reduction in the production of petroleum products. According to Rosstat, total petroleum product production in the first nine months of 2024 decreased by 2.4% year-on-year. Therefore, it is now much harder for oil companies to keep prices within acceptable regulatory limits. As a result, the risks of gasoline price increases remain, regardless of the season.

As of the end of October, retail gasoline prices have risen by 8.7%, outpacing the country's average inflation rate of 7.02%. The biggest contribution to the price increase came from premium-grade gasoline (AI-98 and higher), which rose by 17.5%. The price increase for AI-92 and AI-95 is closer to the inflation rate, at 7.2% and 7.6%, respectively.

Gusev points out that premium-grade gasoline should be excluded from the inflation calculation by Rosstat, as it is a product for wealthier individuals. These grades could be traded on the exchange, and their market price would form freely. There is steady demand for them.

However, Tereshkin believes that Rosstat is unlikely to stop including AI-98 in its calculations for the overall price index. It is important to maintain stability in the rules of calculation; otherwise, Rosstat's data will become unreliable, like a speedometer with a tampered odometer.



Translated using ChatGPT.

Source:  https://rg.ru/2024/11/19/nalivaiut-pro-zapas.html