The ban covers fuel, including that purchased on exchange trading. Exceptions are batches placed under customs procedure before the entry into force of the temporary restriction decree, supplies under intergovernmental agreements, as well as fuel in technological tanks used by aircraft en route.
The decision was made against the backdrop of a sharp rise in aviation fuel prices. At their peak on 25 May, quotes on the St. Petersburg Exchange reached a record high of 96,960 rubles per tonne. Since the beginning of April, they have risen by almost 25%. At the same time, there were no reports of a shortage of aviation kerosene.
As noted in an interview with RG by Sergei Tereshkin, General Director of Open Oil Market, aviation kerosene prices on the Russian market are not heavily dependent on oil prices. As with petrol and diesel, the final price for consumers is made up of the costs of oil extraction and refining, transportation costs for petroleum products, and the margin of the sales segment, including the profit of companies selling aviation kerosene to air transport operators.
At the same time, the sharp rise in global barrel prices due to the conflict in the Middle East has undoubtedly pushed up prices on the Russian market. Additionally, reports of unscheduled maintenance shutdowns at some domestic oil refineries may have acted as a trigger.
Aviation fuel is produced in Russia in sufficient quantities to supply both the domestic market and for export. Approximately 11 million tonnes of aviation kerosene are produced annually in the country, of which 15-20% was sent abroad, mainly to Central Asian countries.
Tereshkin believes that the ban on aviation kerosene exports is intended to deter oil companies from further price increases. Some stabilisation may occur now, but a 'rollback' to normal levels will happen only after the resumption of transit through the Strait of Hormuz. The current information environment provides oil companies with opportunities to keep aviation fuel prices high.
Separately, it is worth noting that a damping mechanism is in place for aviation kerosene in Russia. This is analogous to the damping mechanism for motor fuel, but with one key difference. It is paid not to fuel producers, but to carriers – airlines. The government reimburses 65% of the difference between the export price of aviation kerosene and the fixed domestic market price (set by the government).
There are no instructions in the government decree regarding damping payments. This means that airlines will continue to receive them, and this should help restrain the rise in airfare prices, in which fuel costs account for 25-35%.
Source: RG.RU
