MIL OSI Translation. Region: Russian Federation –
Despite the skepticism of market participants about the idea of limiting gasoline exports, the government is beginning to formally prepare for its introduction. The White House is preparing to add gasoline to the list of goods, the export of which may be temporarily restricted. This will give the authorities the opportunity to promptly introduce a ban if such a decision is made. The largest exporter of gasoline now is Surgutneftegaz.
The government instructed the Ministry of Energy to prepare draft acts on the establishment of temporary exports of “certain types of oil products”, follows from the minutes of the meeting with Deputy Prime Minister Alexander Novak on April 21. The point is that, if necessary, the White House could promptly prohibit the export of gasoline to countries outside the EAEU.
According to the text of the protocol, the government decided to include gasoline in the list of goods that are “essential for the domestic market, in respect of which, in exceptional cases, temporary restrictions or export bans may be imposed”.
Such a list is established by government decree No. 877 of December 15, 2007. The list arose because in 2007 in the Russian Federation there was a significant increase in prices for food products (grain, dairy products, vegetable oils), recalls the managing partner of the legal company Position Prava, Yegor Redin. He notes that the inclusion of gasoline in the list does not in itself entail consequences, but allows for the rapid introduction of restrictive measures in the future.
In April, the White House began to discuss the introduction of a seasonal embargo on gasoline exports as one of the measures to prevent fuel prices from rising during periods of increased demand. On April 21, Alexander Novak said that there are no plans to introduce the embargo: “The measure is needed during periods when there may be problems with the balance, not during the year, but when spring field work, autumn field work – demand grows and when factories for repair become “(quoted by Reuters). The largest exporter of gasoline is the Kirishi refinery of Surgutneftegaz.
In March, according to preliminary estimates, Russia exported to the EAEU countries: 73.4 thousand tons of gasoline to Kyrgyzstan, 7.6 thousand tons to Belarus and 0.3 thousand tons to Kazakhstan, in total, this is 20% of all gasoline exports, notes Anna Lishnevetskaya from Petromarket.
If restrictions are introduced on the export of gasoline in all directions, except for the EAEU countries, then about 200-400 thousand tons of the product per month will be “banned”.
Refineries that regularly ship significant volumes of gasoline to Europe will suffer from export restrictions: LUKOIL’s Kirishsky, Antipinsky, Nizhny Novgorod refineries. The export share of the Kirishi refinery is about 35%, the volume is on average 140 thousand tons per month, the plant exports almost all of its AI-92 gasoline to Europe through the port of Ust-Luga, explains Ms. Lishnevetskaya. In her opinion, the export restriction may lead to a significant drop in wholesale prices, since the supply of gasoline in the domestic market will grow by 200-400 thousand tons, which is 7-14% of the current demand.
Until now, experts and market participants were skeptical about the prospects for the introduction of restrictions. So, in the event of a ban on exports, oil companies may switch to the export of naphtha and other components of gasoline. In addition, if domestic gasoline prices fall too much, companies could cut down on refining.
For the entire industry, losses from export of naphtha instead of gasoline may amount to RUB 1.3–2.6 billion. per month, estimates Anna Lishnevetskaya. In her opinion, the regulator can use additional levers of influence on the refinery, preventing a decrease in gasoline production. If, as a result, oil refining for Russian refineries becomes unprofitable, it will begin to decline to a level that allows balancing the demand and supply of gasoline in the domestic market, the expert said.
A source: Kommersant
EDITOR’S NOTE: This article is a translation. Apologies should the grammar and / or sentence structure not be perfect.