Gasoline could not stand the rise in price

The country's gasoline market is in a fever again. In three weeks, wholesale prices increased by 20%, but then slightly decreased. Independent gas stations can no longer afford oil products at such prices, experts say. Now everything will depend on the speed of the refinery's withdrawal from repair and the government's export policy in order to saturate the domestic market, they believe.

From January 22 to February 10, AI-92 gasoline prices by The St. Petersburg International Mercantile Exchange (SPIMEX) increased by 22% - from 46.9 thousand rubles per ton to 57.5 thousand rubles. And AI-95 gasoline — by 22%, up to 59.5 thousand rubles.

In Crimea, where only independent gas stations operate, it was announced this week that prices at some gas stations on the peninsula have increased from 20 to 60 kopecks per liter.

"Due to the limited volume of wholesale sales on the stock exchange, local traders cannot purchase the required amount of light oil products at lower prices. As soon as wholesale prices begin to decline, this will have a timely impact on the retail cost of gasoline and diesel fuel at gas stations," the Crimean Ministry of Fuel and Energy said on February 11.

From that day, however, wholesale gasoline quotes went down and two days later somewhat offset the previous growth. AI-92 fell to 53.2 thousand rubles per ton, and AI-95 — to 57.5 thousand rubles.

On February 18, Deputy Prime Minister Alexander Novak will convene a meeting on the situation on the oil products market, Interfax reported. The Deputy Prime Minister himself told reporters that the situation with oil refining is stable and the production of petroleum products may even increase this year.

Maxim Khudalov, chief strategist at Vector X Investment company, notes that several factors influenced the price increase at once.

"Actually, this is the impact of excise taxes on gasoline, which have increased by 1,438 rubles per ton since the beginning of the year, and an increase in consumption against the background of a warm winter, as some of the "snowdrops" in the central regions of the country hit the roads earlier than usual. Plus, the effect of fires in warehouse complexes, which provokes a speculative component," says Maxim Khudalov.

Igor Yushkov, a leading analyst at the FNEB and an expert at the Financial University under the Government of Russia, notes that in January and February there was a series of attacks by the Ukrainian Armed Forces on refineries and oil depots.

"The Astrakhan Gas Processing Plant and a number of other enterprises suffered. Therefore, there is a decrease in supply for the domestic market. And in these conditions, vertically integrated companies primarily meet the demand of their gas stations. As a result, less fuel is supplied to the stock exchange and competition begins for it," explains Igor Yushkov.

In his opinion, the price increase continued as long as there was demand for fuel.

"The regulation of retail prices for petroleum products is strong, and the FAS (Federal Antimonopoly Service) strictly monitors the changes, as this is a social issue. And at a certain point, the price of gasoline on the stock exchange reaches a level where it makes no sense to buy it, and it is more profitable for independent gas stations to limit their sales than to work at a loss," says Igor Yushkov.

In his opinion, the decrease in prices since February 11 is explained by a decrease in demand from independent gas stations.

"Then everything will depend on how quickly the refinery capacities will be withdrawn from repair and whether there will be any signal to oil companies from the country's leadership. The Federal Antimonopoly Service demands to ban the export of gasoline, and the government may exchange the ban for an increase in supplies to the stock exchange from oil companies. This is an acceptable option for everyone," the expert believes.

Last year, the ban on gasoline exports, also after the attacks of the Ukrainian Armed Forces and repairs at the refinery, was in effect from March to mid-May, and oil companies will have to choose, according to Igor Yushkov, whether to send part of the export volumes to the domestic market or get a ban on supplies abroad for at least a few months.