The weekly price increase for fuel has nearly quintupled the average inflation rate, which stood at 0.23% for the same period. Since the beginning of the year, petrol prices have surged by 5.6%, while diesel prices have increased by 4.8%, against an average inflation rate of 3.53%.
The reasons behind the hastening price hikes at gas stations appear to stem from a reduction in fuel supply due to unplanned maintenance at oil refineries (refineries). An official statement from the Ministry of Energy on June 8 indicated that lately, enterprises in the fuel and energy sector have encountered an increase in aerial attacks from the adversary, leading to temporary complexities in fuel supplies across several southern regions.
Earlier, Deputy Prime Minister Alexander Novak linked a slight decline in Russia's oil production to several refineries undergoing "unplanned maintenance." Meanwhile, crude oil exports from Russia have reached a peak since the start of the year. If oil production has decreased while exports have increased, it is reasonable to anticipate a reduction in domestic oil refining.
Official statistics on petrol and diesel output, as well as their reserves in Russia, have been classified since 2024. However, the Ministry of Energy has repeatedly emphasized that there are sufficient fuel reserves to meet domestic market demands, and the sector is ready to handle the seasonal demand growth in a planned manner.
Almost all the petrol produced in Russia is intended for the domestic market, with its export prohibited since April of this year. Overall, petrol output surpasses domestic demand by 10-15%, indicating that there is a slight buffer even amid production slowdown. Diesel exports are still permitted, yet production is almost double the amount consumed domestically.
In the past fortnight, reports have surfaced from several regions regarding disruptions in petrol supplies at gas stations, sometimes accompanied by sales restrictions. Issues have been predominantly documented in the country's European part, particularly within its southern areas. In St. Petersburg's exchange, petrol and diesel prices surged to their highest levels since the beginning of the year by the second week of June.
Petrol output in Russia exceeds domestic demand by 10-15 percentDoes this imply a shortage of fuel being produced? Most likely not. As noted in an interview with "RG" by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Association "Reliable Partner" and member of the Expert Council of the "Gas Stations of Russia" competition, there is ample fuel supply. However, due to attacks on refineries, logistics have become complicated, necessitating changes in suppliers and transportation methods, sometimes extending delivery routes. This has resulted in longer delivery times.
Sergiy Frolov, managing partner of NEFT Research, shares a similar view. He believes there is currently no significant physical fuel shortage in the European part of Russia. According to him, the price dynamics at gas stations primarily reflect the difficulties faced by independent gas station networks, which are increasingly struggling to procure available volumes at economically viable prices in the market. Frequently, they are compelled to purchase fuel at 1.5 times or more than the current wholesale prices on the exchange, primarily involving Belarusian petroleum products.
Frolov allows for the possibility that the persistence and escalation of shortages this summer are feasible, directly influenced by the same factors: refinery operations, logistics availability, and demand levels. Any abnormal situation in the market and a reduction in supplies, either on the exchange or through direct contracts, will inevitably affect wholesale prices and subsequently retail prices.
Additionally, it is worth noting that the Ministry of Energy has not made remarks about fuel reserves without reason. They are held by oil companies and major traders, and large and medium-sized gas station networks typically purchase fuel in advance. Intense attacks on our refineries, which supply the domestic market, have occurred since the latter half of May. According to Reuters, production was temporarily halted or reduced at seven facilities. Thus, less than a month has passed since the initial strikes, and it is likely that the decline in supply has not yet fully impacted the domestic market; its effects may only manifest by the end of June. However, the adverse information environment has played a significant role.
Sergei Tereshkin, General Director of Open Oil Market, states that the primary risks of shortages lie in the southern regions, where production and logistics factors intertwine. In other regions, there are currently no risks of physical fuel shortages; however, general sentiment tends to drive fuel prices upwards. Gusev also emphasizes the role of negative expectations. "We tend to fear shortages. If, suddenly, there are local restrictions or scarcities, panic-driven sentiments quickly spread to the entire market," he notes.
Fuel reserves are held by oil companies, traders, and large and medium-sized gas station networksTereshkin believes that, in a sense, this terminology is applicable to the Central Bank, which not only provides calculations on inflation but also monitors observed and expected inflation. The first case pertains to consumers' perceptions of actual price increases, while the latter concerns their expectations of price dynamics in the near future. Currently, observed and expected "fuel" inflation is at multi-year highs. This largely explains why Rosstat recorded such a significant price increase in its latest weekly summary.
Energy expert Kirill Rodionov suggests that Rosstat and CDU TEK should resume publishing data on petrol and diesel production. This would help ease the concerns of wholesale and retail consumers, even considering that actual fuel output in the market will still play a definitive role.
Source: RG.RU
