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Russia considering gasoline export ban as domestic fuel prices rise

Highlights

May increase obligatory exchange trade to 15% of volumes

End of maintenance season should stabilize exchange prices

Platts assessed gasoline premium unleaded FCA basis Moscow at Rb60.40/mt July 22

Russian energy minister Nikolai Shulginov said July 22 that the Kremlin is considering introducing a ban on gasoline exports from next week as domestic fuel prices rise.

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Gasoline prices in Russia have risen in recent weeks on the back of a boom in domestic tourism, as a result of coronavirus restrictions which complicate foreign travel.

"If exchange prices remain at their current record levels, the process of banning gasoline exports will be launched next week," Shulginov said.

He added that the government is also considering signing agreements with oil companies regulating wholesale gasoline volumes and prices and increasing the compulsory exchange trading volume to 15%. The current compulsory exchange trading volume is 11%.

Prices for 95 gasoline on the St Petersburg International Mercantile Exchange (SPIMEX) reached a record level of Rb 60,000/t July 22, while 92 gasoline was priced at Rb 57,487/t, up 30% year to date.

S&P Global Platts assessed gasoline premium unleaded FCA basis Moscow at Rb60.40/mt July 22, and gasoline regular unleaded FCA basis Moscow at Rb58.55/mt.

Shulginov said that the recent growth in wholesale gasoline prices will not significantly impact retail prices for the end consumer. This is partly due to the dampening mechanism, which compensates Russian oil companies when domestic prices are below export netbacks.

"Also, after the completion of scheduled maintenance at refineries by the end of July, the increase in gasoline production will help stabilize exchange prices," Shulginov said.

Russia has considered a similar export ban on oil products before. At the end of April the energy ministry published a draft outlining a potential ban on gasoline exports for three months aimed at easing pressure on domestic prices. However, in May Deputy Prime Minister Alexander Novak said that due to sufficient availability and the fact that Russia only exports around 10% of gasoline production. there was no need for an export ban.