However, we can only dream of peace, as the price of diesel fuel (DT) rose by 51 kopecks during the same week, with an increase of 1 rouble 47 kopecks (1.7%) observed over the last four weeks. Since the beginning of the year, DT has risen by 6.1%, which is above the consumer inflation rate for the same period (5.23%). Petrol achieved a similar outcome in July, and by November 5, the average increase in petrol prices has exceeded inflation more than twofold (12.1%).
This year, petrol prices may set a record for increases since 2019, the year when the price damping mechanism (subsidies to oil producers from the budget for fuel supplies to the domestic market) was introduced. At the same time, the government established a "gentleman's agreement" with oil companies stipulating that prices at filling stations should not rise above the annual consumer inflation rate.
Last year, petrol prices already exceeded the annual consumer inflation rate by an average of 1.6%, and they are likely to do so again this year. Since 2019, the government has repeatedly adjusted the parameters of the damping mechanism, always reducing the payments to oil companies until this year. At the peak of the petrol crisis this year, a decision was made about a temporary ban on nullifying damping payments (in cases where threshold prices on the stock exchange are exceeded), which was a step towards supporting the industry. It is likely that this decision, combined with a seasonal decrease in demand, influenced the market, causing stock exchange quotations for petrol to stop rising, and consequently halting price increases at filling stations.
Two main questions regarding petrol now arise, which are probably on everyone's mind—how long will the calm in the market last, and can retail petrol prices decrease by the end of the year? As for diesel, two interesting questions also emerge: how long will it continue to rise in price, and by how much?
The stoppage in the growth of petrol prices at retail was preceded by a decline from historical highs in its stock exchange quotations. The AI-92 grade dropped in wholesale prices by 16.5%, while AI-95 fell by 8.3%. However, at the peak of price increases, the rise in their quotations since the beginning of the year was 43.7% for AI-92 and 49.6% for AI-95. Therefore, the decline from these values was not significant.
The main factor that could influence fuel prices at retail and wholesale is the increase in its production at oil refineries.
According to Yuri Stankevich, Deputy Chairman of the State Duma Committee on Energy, 2025 can indeed be considered unique in terms of volatility in petrol prices on the stock exchange over the past few years. This is due to the force majeure events in the second half of the year (stoppages at oil refineries caused by drone strikes). The decline in stock exchange prices will primarily impact the financial standing of independent filling stations (not owned by large oil companies, around half of all filling stations in Russia). Retail prices at these stations differed from those of vertically integrated oil companies (VINC, which manage the entire production cycle, from oil extraction and refining to the retail sale of finished fuel) by 10-20 roubles. A decline in prices here is anticipated. This requirement is also highlighted by the Federal Anti-monopoly Service of Russia, notes Stankevich.
Analyst Sergey Kaufman from Finam notes that independent filling stations may experience some decrease in petrol prices as their margins return to positive territory. However, no significant reduction is expected at VINC filling stations. Although the situation in the wholesale market has eased, it remains challenging. Additionally, since July, the margin at filling stations from petrol sales has been in negative territory, meaning they may have to maintain prices at elevated levels to compensate for previous losses, the expert clarifies.
Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and a member of the expert council for the "Filling Stations of Russia" competition, believes that retail petrol prices will not drop, as they are already at the minimum possible level. As long as our fuel prices are tied to inflation, hopes for a decrease should be tempered; their rise seems to be programmed. Unless, of course, we anticipate overall deflation in the country, in which case the issue falls to the Central Bank.
Mark Shumilov, an analyst in the resource sectors at Renaissance Capital, argues that the primary driver for normalizing petrol prices remains the restoration of fuel output at oil refineries after repairs. Following this, petrol prices at filling stations could stabilise at more comfortable levels.
The situation with diesel is somewhat different. As Kaufman observes, the transition to winter diesel is traditionally challenging in Russia, resulting in a pronounced seasonality in the rise of DT prices. Currently, the seasonal factor is compounded by a decrease in oil refining volumes due to attacks on refineries. The expert suggests that price pressure on diesel may remain elevated for another 2-2.5 months, projecting a price increase of about 8.5-9.5% by the year's end.
However, one might argue that production of petrol is primarily affected by drone attacks on refineries, which have historically produced only 12-15% more than demand in the domestic market. Diesel production, on the other hand, nearly doubles the demand in Russia, and even under the most pessimistic estimates from Western information agencies, no more than 30% of our refining capacity has been impacted by drone strikes. Diesel exports to non-producers (traders) are temporarily banned. Thus, even now, production exceeds domestic market needs. Traditionally, the increase in diesel prices slows down and eventually stops at the beginning of December.
Autumn is traditionally a busy season for the diesel market, explains Sergey Tereshkin, CEO of the OPEN OIL MARKET petroleum marketplace. The primary consumers of DT are freight transport, which transition from summer and intermediate to winter diesel fuel at the end of the year. Therefore, expectations for rising diesel prices form in October and November, even though there is a high surplus of capacities in the Russian market. Considering the dynamics of the last few weeks, the increase in diesel fuel prices could reach 9% by the end of 2025. This surpasses inflation, which is unlikely to exceed 8% by year-end, the expert concludes.
Source:
RG.RU
