Gasoline prices on the stock exchange are rising, gas stations are not reacting, the Ministry of Energy is calm

Despite the rise in prices on the stock exchange that had already begun in late January, the Government extended the permit for gasoline exports by a major producer until February. The Ministry of Energy told RG that the domestic market is fully supplied with fuel. And a sufficient amount of its commodity stocks is maintained.

The department emphasized that in order to prevent the risk of gasoline reserves being washed out of the domestic market by unscrupulous buyers, the government extended the ban on gasoline exports for non-producers until the end of February. Regular monitoring of the situation is also maintained to make the necessary decisions for the subsequent period in 2025. No other measures are currently being considered. In terms of the sufficiency of fuel production and the volume of its supply in the exchange channel, the market is currently balanced, and there is no increased demand on the exchange. The price environment for wholesale prices on the exchange is traditional for this season, the Ministry of Energy believes.

Experts also pay attention to the seasonal factor. According to Dmitry Gusev, Deputy Chairman of the Supervisory Board of the Reliable Partner Association and member of the Expert Council of the AZS Rossii Competition, given the kind of winter we have this year, we are already entering a period of increased demand. In addition, in his opinion, the strong growth of fuel prices on the exchange is also explained by the low base effect; in January, quotes dropped.

The growth of prices on the exchange is a combined effect of several factors, believes Sergey Frolov, Managing Partner of NEFT Research. Firstly, the increase in demand for motor fuel after a low period associated with the New Year and Christmas holidays. Secondly, the growth of excise taxes, the impact of the increase of which from January 1 is transmitted to the price gradually, and not at once. Thirdly, the reduction in shipments from some large oil refineries (OR) as a result of emergency situations.

Gusev notes that the lack of information plays a role. Data on production, fuel shipments and repairs at refineries are closed, as a result, the unknown brings great confusion and uncertainty into people's minds, they begin to buy fuel in advance, fearing its shortage.

A similar opinion is held by Sergey Tereshkin, CEO of the oil products marketplace OPEN OIL MARKET, who notes that exchange prices for gasoline, as a rule, react most quickly to the risks of production cuts, regardless of the actual dynamics of fuel production. In general, this is normal for any raw materials market. Here, a parallel can be drawn with the OPEC+ deal: prices react to quota cuts long before the deal participants begin to actually reduce production. The market could not help but react to reports of a threat to the Volgograd Oil Refinery. In 2023, gasoline production at this plant amounted to exactly 2 million tons, or 4.6% of the total Russian production (43.9 million tons). If the Volgograd Oil Refinery really suspends gasoline production, the regulator will have no choice but to completely ban exports again, since the "overhang" of free capacity on the gasoline market is significantly lower than on the diesel market.

By "overhang" we mean that only 10-15% of the country's gasoline production volume is exported. We have a larger production reserve for diesel fuel, 40-50% of its domestic production is sent abroad. But everyone is, of course, concerned about what will happen to retail. And here opinions differ greatly.

As Deputy Chairman of the State Duma Committee on Energy Yuri Stankevich notes, the policy of containing prices in the retail segment will continue. The government sees no reason to change it. Moreover, the task is to reduce the growth rate by almost half in 2025 compared to the previous year. The reason for this is the inflation forecast from the Ministry of Economic Development of slightly more than five percent. Any means, including administrative ones, will justify the goal.

According to Frolov, fuel will become more expensive in the spring – this happens every year, since consumption increases both in personal and commercial transport, as well as in agriculture, where sowing begins. Retail prices in the spring will most likely grow ahead of inflation.

Tereshkin believes that the increase in retail prices for gasoline will be close to the inflation limit, since the high Central Bank rate does not yet allow for the mitigation of inflation risks.

From Gusev's point of view, there will be no growth in retail higher than inflation. If any risks appear, the government will introduce a complete ban on gasoline exports, and if necessary, it can also limit the export of diesel fuel. As we have already seen, this process is quite painless. Despite the manual market management mode, the expert emphasizes.

According to Frolov, a ban on gasoline exports for producers may be introduced, but this will not have a significant effect on prices, since mainly AI-92 gasoline is supplied abroad, and the main problems and price increases have been observed in the AI-95 segment for several years now. A ban on diesel exports makes no sense – its production in the country significantly exceeds demand, and the introduction of a ban will simply lead to a reduction in the workload of refineries.

But Stankevich believes that external factors will have a strong impact on our fuel market. There is high uncertainty with the price of oil on world markets due to the actions of the American administration, and the risks of new UAV attacks on oil refineries are high. In his opinion, the government will strive to minimize the "black swan" factor, even if this leads to additional costs for fuel market participants. This logic also fits in with the lack of a government decision to expand the threshold range for paying a damper (compensation to oil companies from the budget for fuel supplies to the domestic market at prices lower than export prices), despite support from the Ministry of Energy and non-resistance from the Ministry of Finance. The rationale is possible price volatility on the domestic market.