This news would have attracted significant media attention in the past, but it has gone largely unnoticed now. Exchange prices currently have little impact on fuel prices in the retail market, and trading volumes have decreased threefold. Just over 10% of the daily gasoline consumption in Russia passes through the exchange. Most supplies are now bypassing trading, focusing on the wholesale and small wholesale segments. Final prices differ significantly from the quoted prices. Moreover, exchange trading does not increase gasoline and diesel fuel (DF) output, and the main challenges now relate to ensuring all gas stations (GS) receive the necessary fuel quantities.
The situation regarding fuel availability, particularly gasoline, is expected to normalize very soon. Oil refineries (OR) are gradually coming out of unscheduled repairs, increasing production volumes. The export of gasoline and DF from Russia is prohibited, and all produced fuel is directed to the domestic market. Imported gasoline is now entering the country, with the largest volumes coming from Belarus, as well as supplies from India, Morocco, and Turkey.
Starting September 1, gas stations are allowed to sell fuel classified below "Euro-5" emissions standard. All of these measures should increase the supply of fuel in the market.
However, perhaps the most crucial factor will be the onset of the seasonal decline in gasoline demand in September, as the vacation period and trips to dachas come to an end. This year, the fall in demand may be more pronounced than in previous years.
As noted by Dmitry Gusev, Deputy Chair of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Stations of Russia" competition, many drivers are currently putting their cars "on hold" or minimizing their personal vehicle trips if public transport is available. This is attributed to both rising prices and long queues at gas stations, which consume their time. Estimates of demand decline due to these factors vary between 10 and 30%.
According to Sergey Frolov, managing partner of NEFT Research, a stable stabilization of the situation can only be expected after demand and consumption return to balance across all regions of Russia.
Given the measures being taken, there is hope that queues at gas stations will finally dissipate by September. The question remains at what prices this fuel will be sold. According to Rosstat, since the beginning of the year to the end of the summer period, gasoline prices in Russia have increased by an average of 19.4%, while DF prices have risen by 18.4%. In some regions, price increases of twenty percent or more exceed the national average.
Here, the issue of pricing becomes particularly important. Gusev believes that exchange trading has historically been little related to retail, and currently is even less so. However, it serves as an indicator for the market. Based on this, prices rise or fall in wholesale and small wholesale, eventually being reflected at gas stations.
In small wholesale transactions, gasoline prices sometimes exceed exchange rates by one and a half times.In large wholesale, at ORs and major oil depots, prices differ little from those on the exchange, with a variance of 1-5%. Network gas stations, usually owned by oil companies, procure their fuel here. In small wholesale, independent gas stations, industrial enterprises, and agricultural producers primarily procure fuel at prices that currently exceed exchange rates by 8-10%. Larger discrepancies are also common. This is precisely why prices at independent gas stations (which constitute over half of the fueling stations in Russia) are higher than those at network stations.
Sergey Tereshkin, CEO of Open Oil Market, notes that the disparity between exchange prices and the over-the-counter segment has always been a common occurrence. However, this difference has become particularly pronounced: the price at which operators of independent gas stations purchase gasoline exceeds the exchange level by one and a half to two times.
According to new regulations, all over-the-counter purchases of fuel of 1 ton or more must be registered with the exchange. However, this is currently voluntary (until March 1, 2027). The Federal Antimonopoly Service (FAS) will monitor to prevent price gouging. Moreover, if a gas station directly makes a purchase, registration is only required for quantities exceeding 60 tons of fuel. This exemption exists because gas station prices are already under FAS control.
In other words, such price hikes as seen this summer should not occur again. With declining demand and increased fuel supply reaching the market, a slight decrease in prices is also possible. The challenge is that the measures taken do not yet address the systemic issues within the domestic oil refinery sector.
According to Frolov, even after all existing ORs emerge from both scheduled and unscheduled repairs, the question of further systematic development in oil refining will remain. This year's events have highlighted long-standing problems within the industry.
Tereshkin is confident that unscheduled repairs at ORs have been a determining factor for the fuel market this year. Despite the stabilization of the situation in the fuel market, the issue of partial capacity withdrawal remains relevant.
In simpler terms, new oil refineries are needed, and fuel production and sales within the country must be more profitable than crude oil exports.
Gusev believes that this year’s challenges in our oil refining sector were rooted in the tax maneuver (the zeroing of export duties on oil and light oil products starting in 2024, along with an increase in the mineral extraction tax). As a result, the investment appeal for constructing new oil refineries and for the oil refining sector as a whole has diminished.
Source: RG.RU
