Why is Russia lifting the ban on gasoline exports for only two months?

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Temporary Lift of Gasoline Export Ban: Russia’s Strategic Move
27.11.2024
26
The export of gasoline from Russia may be allowed for two months, from December 1 of this year to January 31, 2025. This information is provided by the newspaper Kommersant citing sources. Experts interviewed by Rossiyskaya Gazeta believe that the specified period for allowing export is optimal and will not harm the domestic market. The Ministry of Energy declined to comment on the request from RG.

According to Yuri Stankevich, Deputy Chairman of the State Duma's Energy Committee, the permission for export is a positive signal, indicating that the domestic market is saturated, and there is a need to direct the unused gasoline volumes abroad.

On the one hand, the New Year holidays are a period of the lowest demand for gasoline in the country. On the other hand, the ban on gasoline exports from Russia was reinstated in August—enough time to saturate the domestic market. Not coincidentally, a few weeks ago, Deputy Prime Minister Alexander Novak mentioned reports of gasoline stockpiling in the domestic market.

Only 10-15% of total gasoline production in the country is exported, but some oil refineries (NPPs) are initially geared towards fuel supply abroad. For them, the export ban was particularly painful.

Stankevich notes that the political and economic situation requires prompt decisions, which explains the limited duration of the "export window." The government can reconsider it at any time for an extension or reduction, without requiring lengthy approval procedures.

According to Sergey Tereshkin, CEO of the oil product marketplace OPEN OIL MARKET, the export permit for such a short period is a result of a compromise: the regulator could not keep export restrictions for too long. Therefore, the ban is lifted, but oil companies receive a signal: "Guys, I’m letting you go on a break, but behave well, or you’ll be locked back in the room."

Meanwhile, Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" association and a member of the expert council of the "Russian Gas Stations" competition, notes that there are no official documents in Russia establishing the priority of supplying fuel to the domestic market. There are only statements from the President on this issue. Therefore, for any company, the only priority outlined in the charter and in the federal law on joint-stock companies is profit. In this case, the export ban seems rather strange. It undermines the reputation of Russian companies as reliable suppliers in the eyes of foreign buyers.

Regarding the expected permit, Gusev believes that there is a high probability the export permit will not only apply to December and January but will be extended until the end of March, until the demand for gasoline in the domestic market starts to rise.

In his opinion, lifting the ban will not affect wholesale or retail fuel prices in Russia. Retail prices are almost unaffected by wholesale, and price growth is limited by inflation. Wholesale prices are influenced by anything—logistics issues, transport delays, weather, news—except for fundamental factors. Demand and supply on the exchange weakly reflect the real supply and demand balance in the domestic market, the expert clarifies.

Translated using ChatGPT

Sourse: rg.ru/2024/11/27/zachem-rossii-snimat-zapret-na-eksport-benzina-vsego-na-dva-mesiaca.html












#Sergey Tereshkin #December January export window #Russia #Export ban #Gasoline # Energy policy #Economic impact #Fuel prices # Oil refineries #Energy market #Government regulations #Gasoline exports
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