Russia's Spimex reports higher oil products volumes in 2021

Russia's St. Petersburg International Mercantile Exchange reported an increase in the oil products volumes traded in 2021 compared with 2020.

Overall 27.03 million mt changed hands on the exchange last year, 16.6% up on the year.

Premium gasoline sales rose 25.4% to 3.49 million mt, with 20.3% more regular gasoline trading on the exchange, or 6.185 million mt. Diesel sales were 17.6% up at 11.502 million mt, while fuel oil sales rose 8.7% to 1.426 million mt.

Jet fuel, however, recorded drops, with volumes traded 9.9% down at 1.979 million mt as air traffic was slow to recover.

Spimex also reported 44.1% increase in the trading of LPG, with volumes amounting to 1.75 million mt and more refineries joining the trades, while sales of petrochemical products amounted to 245,920 mt, or 59.7% up on the year.

26.5% of the oil products delivered on the domestic market between January-November have been sold on the exchange floor, it said in a statement.

Diesel, gasoline prices surge

Meanwhile, shortages of winter diesel last year, which were especially pronounced in December and led to record high prices, were attributed to buyers increasingly turning to product on the exchange floor, exchange officials said at an online press conference.

"Demand for high-quality winter diesel increased which pushed prices higher," CEO Aleksei Rybnikov said.

The uptick of demand was due to "the efficient work of the tax authorities" for collecting excise duty on kerosene, which led to reduced use of distillate alternatives instead of on-spec winter diesel, said Rybnikov.

The blending of the excise-free kerosene with summer diesel in previous years has provided a substitute to refinery-produced winter diesel, but tax authorities have started monitoring the process and asked for additional duty to be paid.

Meanwhile, winter diesel started shedding value since the beginning of 2022 as demand was seasonally winding down. According to traders, product purchased now could land with buyers at the end of February, early March, when grades with stringent cold properties are no longer required. Rising temperatures have already led to subdued demand for the grade in central Russia.

However, the start of 2022 saw gasoline prices surging on the exchange floor.

The increase was attributed to the lengthy holidays at the start of January, when the exchange was closed for trading, as well as to the increase of excise duty and some of the components of the damping mechanism, which provides compensation to producers when export prices exceed domestic ones.

Russian authorities have suggested that the components of the damping mechanism can be amended, however, no concrete decisions have been made so far.

"There's no deficit of fuel on the exchange, it's available but at a rather high price because of the demand and supply situation. In the end of January, we will see it decreasing," senior manager Pavel Strokov said.

Separately, Spimex said that it expects to launch trading of green certificates, possibly in the first half of the year.

The exchange also said it continues "to improve online export auctions for oil and petroleum products." It added that 2.9 million mt of crude oil and 2.738 million mt of refined and petrochemical products changed hands at the auctions in 2021.

"We have actively developed online auctions, export deliveries of crude oil, oil products and we study which other products can be offered to our companies," said Rybnikov, adding that Spimex expects eventually to resume trading of crude oil futures with physical delivery.