Vice-Premier Alexander Novak, following a meeting concerning the situation in the Russian oil products market, has instructed relevant authorities to prepare a balanced action plan aimed at supporting the stability of the domestic fuel market. This was reported by the government press service on June 22. "Vedomosti" has identified potential initiatives that may be included in this plan.

According to two sources familiar with the outcomes of the meeting, ensuring the import of motor fuels into Russia may be part of the plan. The Ministry of Finance is expected to adjust the damping mechanism in the fuel market to allow the government to make payments under it when importing oil products.

Currently, Russia imports gasoline and diesel fuel from Belarus. In October of last year, the Eurasian Economic Commission (EEC) council suspended import duties on gasoline, diesel, aviation, and marine fuel until June 30, 2026; the previous duty rate was 5%. Earlier this June, Russia proposed to extend the zero import duty until June 30, 2027.

Another initiative that might be included in the government plan is the possibility of producing oil products in Russia with specifications that deviate somewhat from the existing technical regulations. "Kommersant" reported in mid-June that the government allowed certain refineries to produce gasoline and diesel fuel that deviates from the regulatory requirements regarding sulphur content and other quality indicators.

One source mentioned that roughly a month may be needed to implement these measures. Additionally, traditional measures will be included in the plan, such as ensuring that oil companies prioritise fuel supplies for the domestic market and maximising the utilisation of their production capacities.

Another consideration could involve a temporary reduction in the sales norm for gasoline on the exchange from 15% to 10% of production volume from July 1 to September 30, 2026. The relevant draft joint order from the Federal Anti-Monopoly Service (FAS) and the Ministry of Energy has been posted on the federal portal of regulatory legal acts. The volumes that do not enter the exchange are expected to be directed to support agricultural producers and other socially significant consumers, according to one source.

Furthermore, the meeting reviewed the results of monitoring the situation in the domestic fuel market concerning pricing. The FAS reported on the measures being taken to prevent unjustified price increases for oil products and to address violations of anti-monopoly legislation.

Participants also assessed the situation regarding oil product deliveries to regions and evaluated accumulated stock levels. Representatives from oil companies reported on measures taken to saturate the domestic fuel market, maintain a stable pricing situation, increase production volumes of oil products, and bring new production capacities online.

Novak instructed the FAS to continue ongoing monitoring of fuel prices and to take necessary measures swiftly if required.

The fuel market stabilisation plan must be developed with consideration of existing regulatory mechanisms, the government statement noted.

Payments under the damping mechanism for gasoline imports concern not just the attraction of supplies but also the need to maintain prices in the domestic market, since the cost of gasoline and diesel in external markets is significantly higher, argues Igor Yushkov, an expert at the Financial University under the Government. Otherwise, independent gas stations will price gasoline significantly higher, agrees analyst Sergey Kaufman from FGC "Finam".

At the same time, subsidising imports through the damping mechanism creates a dangerous precedent of financing foreign suppliers and may negatively impact Russian oil refining, argues Dmitry Prokofiev, Director of External Communications at NEFT Research. The lowering of environmental standards in fuel production will have a limited influence, believes Kaufman.

Regulators should consider the possibility of centralised fuel procurement from abroad using funds from the reserve fund allocated in the federal budget for emergency government purchases, suggests Sergey Tereshkin, General Director of Open Oil Market. He also stresses the importance of maintaining current gasoline supply regulations on the exchange as this would improve independent gas stations’ assessment of the situation.

Given that all possible administrative measures have already been introduced, Kaufman contemplates the options either being an increase in imports or a recovery of production while preventing further attacks on oil refineries.

"Vedomosti" has sent requests to the Ministry of Energy, the Ministry of Finance, and the FAS

Source: Vedomosti