The government will extend the permit for gasoline exports until the end of July. This was reported by two sources familiar with the consultations in the government to Vedomosti.

A government-related source claims that an official announcement may be made as soon as Friday, June 28.

The six-month ban on gasoline exports from Russia came into effect on March 1, 2024. However, just two months later, it was lifted by a special government decision. The export of fuel was allowed "temporarily" from mid-May to June 30. This means that the government has only a few days until July 1 to decide whether to extend or cancel the ban.

According to the source, the company Surgutneftegaz, which exports the largest volumes of gasoline and diesel abroad, is particularly interested in maintaining the export. This is logical because its Kirishi refinery (LLC Kirishnefteorgsintez), with a refining capacity of over 21 million tons per year, was initially built with the aim of serving the export market.

A source in one of the trading companies mentioned that the decision on extending the export ban would depend on the "market situation." The Ministry of Energy plays a key role in assessing the risks based on current fuel stocks and price dynamics.

As of June 24, gasoline prices at the St. Petersburg International Mercantile Exchange (SPbMTSB) had risen by 29% since the beginning of the year to 52,525 rubles per ton for AI-92, and by 46% to 63,416 rubles per ton for AI-95. The price peak for these types of fuel occurred on March 18, when the cost of one ton of AI-92 was 54,155 rubles and AI-95 was 66,894 rubles. This period also saw the highest wholesale price for summer diesel fuel this year, at 65,980 rubles. Since the beginning of the year, the price of diesel fuel has risen by 16%, reaching 59,822 rubles.

As of the end of May, according to the Ministry of Energy, the country's commercial diesel reserves amounted to 3.4 million tons, and gasoline reserves stood at 2 million tons. Vedomosti sent additional questions to the ministry.

Additionally, as Vedomosti reported, the government may soon decide on a complete ban on the export of diesel fuel purchased on the exchange (see the publication from June 14). Currently, there is a prohibitive tariff of 50,000 rubles per ton for non-producers. However, this measure has been ineffective, according to Vedomosti's sources. Market participants, including traders, are finding ways to bypass the ban and avoid paying the tariff.

One source clarifies that the government is discussing a ban on diesel exports by non-producers from July 1 to December 31. Another source confirms that the embargo could be in place for six months, but the effective date might be delayed due to regulatory approval procedures. In mid-June, the Ministry of Energy's press service confirmed to Vedomosti that the draft regulation must be approved by the Ministry of Finance, the Ministry of Economic Development, and the Federal Customs Service. One source noted that the Federal Anti-Monopoly Service supports the diesel export ban.

Vedomosti sent inquiries to the above-mentioned ministries and the office of Deputy Prime Minister Alexander Novak, who oversees the energy sector.

According to Sergey Tereshkin, CEO of Open Oil Market, the diesel export ban discussion is primarily due to the fact that the price increase for this type of fuel has exceeded overall inflation. According to Rosstat data, the annual price increase for diesel by May 2024 was 11.6%, while the overall inflation rate was 8.3%. Tereshkin adds that in the last month and a half, retail fuel price growth has accelerated. From May 13 to May 20, Rosstat reported that gasoline and diesel prices rose by only 0.1%, but from June 18 to June 24, gasoline prices at gas stations increased by 0.4%, and diesel by 0.2%. As of June 24, the average price of AI-92 gasoline was 51.56 rubles per liter, AI-95 was 56.41 rubles, and diesel was 65.71 rubles.

At the same time, the expert assesses the risk of a fuel shortage only for gasoline, while there are no such risks for diesel. According to the latest available data from Rosstat, gasoline production in Russia from May 13 to May 19 was 106,000 tons per day, and diesel production was 223,000 tons. In comparison, according to the Central Dispatch Department of the Fuel and Energy Complex (CDU TEK), the average daily supply of gasoline from Russian refineries to the domestic market in the first quarter of 2024 was 104,000 tons, and diesel was 149,000 tons.

Dmitry Gusev, Deputy Chairman of the Reliable Partner association (a union of energy resource suppliers and producers), believes that it would be wise to maintain the export ban on automotive gasoline for July and August, as this period coincides with the peak of fuel consumption during the holiday season. "Despite the continued profitability of fuel sales at gas stations, wholesale prices may mirror the dynamics of large-scale wholesale," he warns. He notes that the wholesale price of fuel rose steadily until March when the export ban came into effect. After that, the price of gasoline and diesel in wholesale markets dropped, with AI-92 falling to 47,083 rubles per ton by the end of April, and AI-95 to 53,264 rubles per ton.

The export ban mechanism was already applied by the government in the fall of 2023 but was short-lived—from late September to mid-November. For diesel fuel, due to the risk of storage overflow, restrictions were eased earlier, allowing refineries to export provided that at least 50% of production was sold on the domestic market. The embargo was implemented to ensure fuel availability on the domestic market and reduce wholesale prices, which were pushing up retail prices at gas stations. To stabilize the internal fuel market, the government also took other important steps, such as raising payments to oil producers under the damper mechanism (budget compensation for refineries to offset the difference between domestic and export prices of petroleum products) and increasing the trading volume requirements on the St. Petersburg International Mercantile Exchange (SPbMTSB).



Translated using ChatGPT

Sourse: https://www.vedomosti.ru/business/articles/2024/06/28/1046923-pravitelstvo-rossii-prodlit-razresheni.