Reports of petrol shortages and queues at filling stations have been received from parts of the southern and central regions of the European part of Russia, including Moscow and the surrounding area, as well as some southern areas of Siberia and the Far East.
At a meeting with Deputy Prime Minister Alexander Novak on August 14, it was noted that the situation in the fuel market remains tense, although major oil companies are taking all necessary measures to increase supplies to the most vulnerable regions of the Russian Federation. It was also emphasized that agricultural enterprises are adequately supplied with fuel, and the harvesting campaign is proceeding as planned.
Following the meeting, Novak instructed relevant ministries and oil production companies to take additional measures to ensure fuel supplies to regions currently experiencing strained conditions. In addition, it was ordered to monitor fuel prices for agricultural producers as well as prices at filling stations.Agricultural machinery mainly operates on diesel fuel (DF). Supplies of DF have normalized in the market since late July, and no interruptions are currently being recorded. This is because historically, significantly more DF has been produced in Russia than petrol. According to the latest official data, 41.1 million tons of petrol and 81.6 million tons of diesel were produced in 2024. This is related to the fact that previously, a significant volume of DF (almost half) was exported to Europe, while very little petrol was sent abroad (10-15% of production volume).
Therefore, the shutdowns of oil refineries (ORFs) due to damage sustained from drone strikes have critically affected the petrol supply. It is no coincidence that its export has been completely banned since April, and almost all the output goes to the domestic market (except for consignments sent under intergovernmental agreements). However, this is clearly insufficient. Although, perhaps, the issue is not only a physical shortage.
One of the main factors affecting the reliability of fuel supplies remains logistics. Due to unplanned repairs at ORFs, many filling stations have had to abruptly change suppliers, leading to interruptions and delays in shipments. The infrastructure cannot be stretched indefinitely - it is impossible to load, transport, and unload more than what the railways’ (RR) throughput capacity allows.
Furthermore, as noted by Sergey Tereshkin, General Director of Open Oil Market, in a conversation with "RG," even before the shutdowns for unplanned repairs, the ban on petrol exports effectively became permanent.
This means that even before this year, the balance of supply and demand for petrol in the domestic market was close to zero. A gradual, albeit slow, update of the vehicle fleet could have led to an increase in demand for AI-95 petrol after 2022, while sanctions on supplies of equipment for Russian ORFs restrained the expansion of oil refining capacities.
According to Sergey Frolov, Managing Partner of NEFT Research, it is currently not appropriate to speak of a nationwide fuel crisis; the discussion is about local shortages in specific regions. The main reason is the planned and unplanned repairs at Russian ORFs. Government measures are in place, but they cannot fully eliminate the primary cause of the supply shortages – the reduction in production.
In order to prevent fuel shortages, the government allowed imports starting in July. Belarus became the main supplier. According to Reuters, in July Russia received 212,000 tons of petrol and 162,000 tons of DF from there. However, the capacities of the two Belarusian ORFs are also not limitless. In fact, considering domestic consumption, exporting more than 200,000 tons of petrol per month to Russia is close to their maximum capabilities. Additionally, there is once again the factor of logistics – fuel is delivered to Russia by rail. Importing petrol by sea is very expensive and prolonged. The delivery of the first batch of petrol from India to Russia took 48 days.
Tereshkin believes that in September and October the market is unlikely to see the record growth rates of prices witnessed in June, as participants in the fuel supply chain gradually become accustomed to the risks of shortages. However, the absolute price level will still exceed pre-crisis levels, he argues.
As for the availability of fuel at filling stations, additional volumes of fuel below Euro-5 standard, which have been authorized for sale since August 13, are expected to reach retail by the end of August. These are anticipated to relieve the tension in the market. Nonetheless, Frolov emphasizes that even the production of lower environmental class petrol cannot fully compensate for the lost volumes and resolve the logistical issues of fuel delivery to specific areas.
At the same time, Tereshkin notes that, unfortunately, it is still impossible to rule out the likelihood of new technological downtimes at ORFs. In addition to capacity reductions due to force majeure events, this includes planned repairs, which will impact fuel availability.
According to Dmitry Gusev, Deputy Chair of the Supervisory Board of the Reliable Partner Association and a member of the Expert Council for the Russia's Filling Station competition, there is a general understanding that the market needs to be reformatted. The transition to direct contracts between suppliers and buyers has already begun, as has the reduction in the number of intermediaries - traders. The situation is expected to normalize once the parameters of how the fuel market should exist in our country become clearer. Most likely by October, the expert predicts.
From Frolov’s perspective, the situation can only be fully stabilized once ORF capacities are back online and sufficient to meet current demand.
Source: RG.RU
