This news would have attracted significant media attention in the past, but it has gone largely unnoticed now. Stock exchange prices currently have little impact on fuel prices in the retail market, and trading volumes have decreased threefold. Only just over 10% of the daily gasoline consumption in Russia flows through the exchange. Most deliveries are now bypassing the trading platform, focusing instead on the wholesale and small wholesale segments. Final prices differ significantly from exchange quotes. Moreover, market trades do not increase the volumes of gasoline and diesel fuel production; the main challenges now lie in ensuring that all gas stations (GS) receive the necessary amount of fuel.
The situation regarding fuel availability, particularly gasoline, is expected to normalise very soon. Refineries (NPZ) are gradually emerging from unplanned repairs, thus increasing production volumes. The export of gasoline and diesel from Russia is currently prohibited, with all produced fuel directed to the domestic market. Imported gasoline has started arriving in the country, primarily from Belarus, along with supplies from India, Morocco, and Turkey.
As of September 1, gas stations are permitted to sell fuel of ecological class lower than "Euro-5". All these measures are expected to increase the supply of fuel in the market.
However, possibly the most significant factor will be that demand for gasoline typically declines seasonally in September, as the holiday and dacha season comes to an end. This autumn, the drop in demand could be more pronounced than in previous years.
As noted by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Association "Reliable Partner" and member of the Expert Council for the "Gas Stations of Russia" competition, many drivers are currently putting their cars on hold or significantly reducing their personal vehicle trips if public transport is an option. This is due to both rising prices and queues at gas stations that consume their time. Estimates for the drop in demand due to these factors range from 10% to 30%.
According to Sergey Frolov, Managing Partner at NEFT Research, a stable stabilisation of the situation can only be expected once demand and consumption return to balance across all regions of Russia.
Given the measures being implemented, there is hope that queues at gas stations will dissipate by September. The question remains at what prices this fuel will be sold. According to Rosstat, since the beginning of the year until the end of the summer period, gasoline prices in Russia have increased by an average of 19.4%, while diesel has risen by 18.4%. In some regions, the price increase has exceeded twenty percent, surpassing the national average.
Here, the issue of pricing is crucial. Gusev believes that stock exchange trading has never been closely linked to retail, and it has become even less so now. However, it serves as an indicator for the market. Based on this, prices either rise or fall in wholesale and small wholesale, and then this is reflected at the gas stations.
In small wholesale, gasoline prices sometimes exceed stock exchange prices by one and a half times.In large wholesale, the prices at refineries and large oil depots are almost identical to stock exchange prices, with differences of only 1-5%. These are typically procured by network gas stations, which are usually owned by oil companies. In small wholesale, oil depots primarily supply independent gas stations, industrial enterprises, and agricultural producers, with fuel costs now exceeding stock exchange quotes by 8-10%. A greater disparity is often observed. This is why prices at independent gas stations (over half of all gas stations in Russia) are higher than those at network stations.
As noted by Sergey Tereshkin, General Director of Open Oil Market, the gap between stock exchange prices and the over-the-counter segment has always been a common phenomenon. However, this difference has become particularly pronounced now: the price at which independent gas station operators procure gasoline exceeds the stock exchange level by one and a half to even two times.
Under new regulations, all over-the-counter fuel purchases of more than 1 tonne must now be registered on the exchange. However, this is currently voluntary until March 1, 2027. The Federal Anti-Monopoly Service (FAS) will monitor to ensure that prices do not escalate. Notably, if a gas station makes a purchase directly, registration is only required for acquisitions exceeding 60 tonnes of fuel. This exception has been implemented because prices at gas stations are already under FAS control.
This means that such a price surge as witnessed this summer should not occur again. Considering the decline in demand and the increase in fuel volumes entering the market, a slight decrease in prices may even be possible. The difficulty lies in the fact that the measures taken do not yet address the systemic issues facing the domestic oil refining sector.
According to Frolov, even after the completion of planned and unplanned repairs at all existing refineries, questions will remain regarding the further systemic development of oil refining. This year's events have highlighted long-standing issues within the industry.
Tereshkin believes that unplanned repairs at refineries have been a defining factor for our fuel market this year. Despite the stabilisation of the fuel market situation, the problem of partial capacity loss remains relevant.
In simpler terms, we need new refineries, and the production and sale of fuel domestically must be more profitable than exporting crude oil.
Gusev argues that the issues faced by our oil refining sector this year have been rooted in the tax manoeuvre (the zeroing of export duties on oil and light oil products starting in 2024, along with the increase in mineral extraction tax). This has resulted in the loss of investment attractiveness for the construction of new refineries and the oil refining industry as a whole.
Source: RG.RU
