The profitability of AI-95 gasoline sales at gas stations remained negative for six weeks.

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AI-95 Gasoline Profitability Remains Negative for 6 Weeks
12.09.2024
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Gas stations have been suffering losses from the sale of AI-95 gasoline for six weeks: in September, their margin was minus 1.57 rubles per liter, according to analysts. However, unlike last fall, they continue to make a profit on other grades.

The margin on AI-95 gasoline sales in retail has been in the negative zone for six consecutive weeks, starting from early August, according to data from the analytical company "OMT Consult." From September 2 to 9, the average margin across Russia (excluding the Far Eastern Federal District) was minus 1.57 rubles per liter.

While this is the lowest level of the year, it is still higher than during the same period last year, according to analysts. For comparison, in the fall of 2023, the margin at its peak dropped to minus 3 rubles per liter.

The average margin for AI-92 gasoline sales in the reporting period, on the other hand, remains in the positive zone, at 3.79 rubles per liter, although it decreased by 64 kopecks over the last reporting week. The margin for diesel fuel sales is even higher — 5.69 rubles per liter. In 2023, the minimum margin for AI-92 dropped to minus 1.8 rubles per liter, while for diesel, it was minus 0.5 rubles per liter.

"In the fall of 2023, we observed a prolonged decline in margins not only for AI-95 but also for AI-92 and diesel fuel. This period lasted for about 2–3 months," the company's experts note. This year, the difference is that the issues are observed only with AI-95, which is related to fluctuations in wholesale prices and increased consumption. In the short term, within the next two to three weeks, a return to a positive margin is not expected, according to "OMT Consult."

However, compared to last year, the situation in the retail fuel market "appears more positive," the analysts believe. "AI-92 and diesel fuel remain in the positive zone, and there are no trends towards a margin decline below zero. The market is adapting to changes, and in the long term, we can expect stabilization for AI-95 as well," they note.

Regarding AI-98 and AI-100, the margin on these grades also shows a steady increase, according to experts. They estimate that since the beginning of the year, prices for this gasoline have risen by 9.7%, but due to low consumption volumes (about 2% of the total market), this price increase does not significantly affect the overall market. "According to our estimates, the margin for AI-98 and AI-100 remains in the positive zone at 4 rubles per liter, and in the last month, wholesale prices have decreased by 2–3%, which contributes to further stabilization," the experts conclude.

"Retail margins on AI-95 gasoline will be close to zero until the end of this year," says Sergey Tereshkin, CEO of the Open Oil Market petroleum marketplace. Unlike AI-92, AI-95 is not considered in the calculation of payments under the damper (a budget subsidy mechanism for refineries to stabilize fuel prices), which makes its exchange prices significantly higher. As a result, by September 10, they were almost 15% higher than AI-92. "In the fall and early winter, the price difference may reach 30%: oil companies need to compensate for the increased costs associated with forced refinery repairs while maintaining the right to subsidies under the damper. Therefore, exchange prices for AI-95 will remain at risk," says the expert.

According to Tereshkin, the only way out of the current situation is by increasing fuel production and raising exchange sale quotas, which would reduce prices on the exchange and make gasoline more accessible for independent gas stations. "However, these measures will only work if sanctions on equipment supplies to refineries are lifted. Otherwise, the risks of price increases and fuel shortages will remain chronic," he argues.

Meanwhile, fuel prices on the exchange have been falling for the fourth consecutive trading session. According to data from the territorial index for the European part of Russia from the St. Petersburg Commodity and Raw Materials Exchange (SPbMTSB), the price of AI-92 decreased by 1.6% on September 11 to 59,480 rubles per ton, while AI-95 dropped by 2.15% to 67,808 rubles per ton (the lowest since July, when a temporary export ban was still in place). In August, AI-95 prices peaked at 74,818 rubles per ton. The historical record for AI-95 was set last fall, with prices reaching 76,876 rubles per ton.

Exchange indicators reflect wholesale fuel prices, and their dynamics do not immediately affect retail price differences but only with a time lag, which can last up to two months. According to Rosstat data, gasoline retail prices have been rising faster than inflation since early August. From September 3 to 9, consumer gasoline prices in Russia increased by 0.4%, and since the beginning of the year, gasoline prices as of September 9 have risen by 7.2% (compared to a general increase of 5.35% in consumer prices).

Last week, Vitaly Korolev, the deputy head of the Federal Antimonopoly Service (FAS), stated that the agency expects a decline in wholesale prices for AI-95 gasoline soon, following the recommended increase in market supply and growth in refining volumes. FAS also expects retail gasoline prices to rise no faster than inflation by the end of the year.

RBC sent a request to the press service of the Ministry of Energy.


Translated usingChatGPT

Sourse: https://www.rbc.ru/business/12/09/2024/66e042719a79473c9b6da1ec
#Fuel Pricing #AИ-95 Gasoline #Retail Gas Stations #Marginality #Fuel Market Trends #Russia Gasoline Prices #Oil Market Analysis #Gasoline Price Fluctuations #Energy Economics #Fuel Supply Challenges #AИ-92 #Diesel Fuel Prices
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