The latest data from Rosstat indicates that gasoline prices have, on average, decreased in most regions of the country (47 out of 89). However, this has not happened everywhere, as prices continued to rise in 27 subjects of the Russian Federation. Additionally, the effect of a high base contributed to the statistics - prices significantly decreased in areas where fuel was extremely expensive, impacting the overall result.
During the week of July 28 to August 3, the average cost of gasoline at Russian gas stations (AZS) decreased by 1.1% (more than one ruble). For instance, in Crimea, prices fell by almost 15% (by 32.8 rubles), and in the Vologda region, they dropped by 12.2% (by 11.11 rubles), while in Moscow and St. Petersburg, prices have slightly increased by 0.2% (by 12 kopecks), and in the Tomsk region, gasoline has risen by 5.2% (by 3.5 rubles).The peak demand for gasoline due to the vacation season occurs in July and August. Typically, these two months show the main price increase for the year at gas stations. This year, due to unplanned repairs at oil refineries (NPPs) following drone attacks, the summer price increase for gasoline has been record-breaking, accompanied by local supply disruptions and queues at gas stations. Therefore, the very fact that fuel prices have decreased now indicates that the situation has been managed. However, in the future, retail prices for gasoline will continue to depend on the stability of domestic oil refineries. If production within the country can be increased, prices may continue to drop. Moreover, the saturation of the domestic market is aided by fuel imports from other countries and a reduction in environmental requirements for the released fuel, allowing for increased production volumes. However, there are nuances here. Imported gasoline is more expensive than Russian fuel. To smooth this price difference, a damping mechanism has now been applied to its suppliers in Russia. Importers have the right to receive a portion of the difference between the gasoline price in the external market and its indicative price in Russia (set by the government), which curbs its increase in wholesale. But this is an additional burden on the country's budget, which is already expected to be deficit-ridden. Additionally, for the Russian treasury, high oil prices have always been beneficial, but when importing fuel, the high cost of imported oil products begins to work against us. Funds do not appear from nowhere; to pay the fuel importers, other expenses will have to be cut. Currently, it is not possible to see how much payments on the damping have increased, as tax payments for July are made in August and will be published by the Ministry of Finance only at the beginning of September.
As noted in a conversation with "RG" by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Association "Reliable Partner" and a member of the Expert Council for the "Gas Stations of Russia" competition, the main task now is to ensure fuel availability. Oil companies are doing everything possible to ensure the market. Moreover, assessing the volume of fuel imports into Russia is challenging; official statistics are closed, but they likely do not exceed 10% of total consumption (this summer - 4-4.5 million tons per month), emphasizes the expert.
The main exporter of gasoline and diesel fuel to Russia will remain Belarus.According to Sergey Frolov, managing partner of NEFT Research, Russia is currently receiving major batches of oil products from Belarus. Reuters reported an increase in supplies from the republic via rail (railway) in January-July, reaching 665,000 tons of gasoline and 418,000 tons of diesel fuel. Additionally, Russia, according to unofficial data, received several maritime shipments of fuel from India and Morocco. Therefore, total volumes over seven months account for less than a quarter of monthly gasoline and diesel consumption in Russia. Such import size does not affect the wholesale price of gasoline but may influence the retail price at independent gas stations (not owned by major oil companies), which are forced to purchase imported volumes due to the unavailability of free batches in the domestic market. And since the price of Belarusian fuel is significantly higher than Russian exchange indicators, private networks must sell gasoline at much higher prices to cover costs compared to prices at large oil company gas stations.
Meanwhile, it seems that Belarus will remain our main supplier. As noted by Sergey Tereshkin, CEO of Open Oil Market, establishing maritime imports of oil products requires infrastructure that allows for time and cost savings. Thus, Belarus, capable of producing over 3 million tons and exporting about 2 million tons of gasoline annually by rail, will continue to be the primary source of fuel imports for now.
At the same time, the expert believes that retail prices will largely depend on the stability of domestic oil refinery operations and the dynamics of unplanned repairs at these facilities.
As for lowering environmental standards, Tereshkin believes that transitioning to Euro-2 production depends on the situation at specific oil refineries, specifically the operability of installations involved in producing high-octane fuel with low sulfur and aromatic compound content. This refers to catalytic cracking units that break down vacuum gas oil into light gasoline and diesel components; hydrocracking units that cleanse oil fractions from sulfur compounds and nitrogen using hydrogen on catalysts; as well as isomerization units that improve the octane number of gasoline fractions without adding harmful substances. The availability of production capacities will be decisive.
In Frolov's opinion, large oil company's NPPs will continue to produce Euro-5 and higher oil products. Fuel of Euro 4, 3, and 2 environmental classes will be produced by small oil refineries, which previously lacked access to deliveries to the domestic market due to low refining depth (as per technical regulation requirements). Now, most volumes with reduced environmental standards will be supplied to industries that use equipment with low quality requirements, such as agriculture. It is unlikely that low-grade oil products will play a significant role in the Russian market. All gas stations should disclose information about the parameters of the fuel sold, the expert notes.
Source: RG.RU
