The agreements will regulate the volumes of motor fuel supplied to the domestic market and the retail prices for petrol and diesel in 2026, taking into consideration the anticipated inflation levels, as stated in the government announcement. This decision is aimed at maintaining sufficient fuel volumes in the domestic market during the traditional seasonal increase in demand and agricultural fieldwork.
In other words, the goal of these agreements is to completely eliminate any hint of the risk of fuel shortages in the country and to limit the growth of retail prices. Currently, the volumes of supplies to the domestic market are directly determined by exchange standards and indirectly by export bans. As for the retail prices at petrol stations, it has previously been mentioned that they should not rise above the inflation rate, though this has not been officially codified anywhere. Previous agreements between the government and oil companies concerning the fuel market existed but were typically in the form of gentleman's agreements rather than official documents. The key distinction of the new agreements is that they are expected to formally enshrine both the thresholds for price increases on petrol and diesel as well as the necessary supply volumes of various types of fuel to the domestic market. They just need to be formalised, and the very concept of "agreement" implies that a compromise must be reached between the government and the oil companies, allowing for mutual benefit for all parties involved.
The objective of the agreements is to reduce the risk of fuel shortages and limit the increase in retail prices.However, another scenario is also possible: companies may attempt to present a fait accompli, justifying such a decision by political necessity. Currently, the fuel market is influenced on one side by the Middle Eastern conflict, which is driving up oil and petroleum product prices, and on the other side by unscheduled repairs at our oil refineries (OR), related to drone attacks and challenges in equipment supplies due to sanctions.
Exchange quotations for petrol and diesel are far from historical highs but have increased by 21% and 23%, respectively, since the beginning of the year. Retail price growth has been more modest, as prices are under tight control by the Ministry of Energy and FAS, but the increase in petrol prices has outstripped the level of inflation. According to Rosstat, as of April 27, AI-92 petrol rose by 3.7% against an inflation rate of 3.2%.
This indicates that there are grounds for strict measures. As noted in a conversation with “RG” by Dmitry Prokofyev, the Director of NEFT Research for external communications, this represents a qualitatively different level of intervention. The soft agreements of the past, often interpreted by oil companies as "suggestions," are being replaced by legally signed agreements with clear parameters. This is no longer a gentleman's agreement, but a full-fledged contract with a set of direct obligations and, crucially, reciprocal proposals from the government. This marks a transition to direct manual management of the industry, according to the expert.
This paradigm is further evidenced by the government’s decision not to extend the moratorium on the cancellation of price damping for oil companies. The damping mechanism provides partial compensation to oil companies from the budget for supplying fuel to the domestic market at prices lower than export prices. The amount of these payments is calculated based on the difference between the export price of fuel and the indicative domestic price, which is set by law. The damping mechanism is cancelled if petrol AI-92 prices on the St. Petersburg exchange exceed the indicative price by 20%, and diesel (DT) by 30%. Since October 1 of last year, this rule's application had been suspended as a measure to assist oil companies due to tightened US sanctions. However, as of May 1 of this year, the damping cancellation rule has been reinstated.
According to energy expert Kirill Rodionov, the overall lifting of the moratorium eliminates the "ambiguity" in regulating the fuel market, where export bans were supposed to encourage oil companies to restrain exchange prices, but the damping payments did not consider their actual dynamics.
Experts believe that the measures being taken should prevent significant price increases at petrol stations during periods of high demand.Returning to the agreements, Prokofyev states that the new mechanism constitutes a direct administrative contract. The Ministry of Energy has been granted the authority to impose specific quotas for fuel supply to the domestic market (from the total refining volume), while the FAS will oversee their compliance.
Obligations should not be one-sided, asserts Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Stations of Russia" competition. If there is an obligation to supply a certain amount of fuel to the domestic market, then there must also be an obligation to purchase it from someone. He believes that oil companies also need to be offered certain benefits.
As Prokofyev notes, the government cannot directly dictate to oil refineries how much and to whom they should sell, but they have created conditions that are very difficult to refuse, in the expert's opinion. In exchange for the guarantee of stable sales and a predictable price level, companies receive certain preferences from the government. In return, the Ministry of Energy fixes minimum indicative indicators (quotas) for each plant concerning the supply of petrol and diesel to the domestic market. In effect, this is a market negotiation, but with the government sitting at the negotiating table.
However, our primary concern is whether this new mechanism will help curb price increases at petrol stations. Gusev believes that large petrol station networks, particularly those with state participation, will keep prices stable. However, he expresses considerable doubts regarding private companies. He emphasises that it is not just about containing fuel prices, as they do not simply rise for no reason, but rather about establishing an energy-efficient fuel policy.
From the perspective of Sergey Tereshkin, CEO of Open Oil Market, the increase in retail petrol prices will likely exceed the "inflation minus" threshold, whereas the diesel segment is expected to adhere to this guideline—at least until autumn arrives. Overall, industry regulation is heavily reliant on "gentlemanly" agreements, which can only provide a temporary effect: the issue of rising prices will inevitably require new agreements down the line. This is a series that will repeat itself again and again.
Prokofyev shares a similar opinion, suggesting that the effect will likely be temporary. Such fuel agreements function as a one-off remedy: they alleviate acute pain but do not treat the chronic condition. In the long term, this only exacerbates discrepancies, rendering refining even more dependent on administrative infusions and entirely hollowing out market incentives for efficiency improvement. It is far more beneficial for companies to secure guarantees of domestic sales at a fixed price than to invest in modernisation for a competitive edge in the export market. We are looking at not just an economic measure but a political compromise designed to smooth out peak demands during a season. It will provide a respite but will not permanently solve the structural problem. The government and the oil companies have found a way to patch the gaps in the summer fuel balance through mutual concessions. However, this model, if it becomes permanent in the long run, will only increase the budget's dependency on manual management of the sector. In a context where stability trumps efficiency, such a choice appears logical. However, it does not, of course, resolve the systemic issue of rising fuel prices.
Source: RG.RU
