The reasons behind the rapid rise in gas station prices appear to stem from reduced fuel supply due to unscheduled repairs at oil refineries (ORPs). In an official statement released by the Ministry of Energy on June 8, it was noted that recently, entities within the fuel and energy complex have been facing an increase in enemy air attacks, leading to temporary complications in fuel supplies in several southern regions.
Earlier, Deputy Prime Minister Alexander Novak linked a slight decline in oil production in Russia to several ORPs undergoing "unscheduled maintenance." However, crude oil exports from Russia are currently at their peak since the beginning of the year. If oil production has decreased while exports have increased, it logically follows that domestic oil refining must also be reduced.
Official statistics on gasoline and diesel production, as well as their reserves in Russia, have been closed since 2024. However, the Ministry of Energy has repeatedly emphasized that there are sufficient fuel reserves to meet domestic market needs, and the industry is prepared to navigate the seasonal surge in demand in a planned manner.
Almost all gasoline produced in Russia is directed to the domestic market, as its export has been prohibited since April of this year. Overall, gasoline production exceeds domestic demand by 10-15%, meaning there is a slight margin for error even with reduced production. Diesel exports are still permitted, but the amount produced is almost twice as much as what is consumed domestically.
In the past two weeks, some regions have reported disruptions in gasoline supplies at gas stations, and occasionally there have been restrictions on sales. These issues have been noted primarily in the southern areas of the country, particularly within the European part. By the second week of June, prices for gasoline and diesel at the St. Petersburg exchange have reached their highest levels since the start of the year.
Gasoline production in Russia currently exceeds domestic demand by 10-15 percent.Does this mean that there is a shortage of fuel? Most likely not. In a conversation with "RG," Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Stations of Russia" competition, noted that fuel is adequate; however, logistics are being complicated and adjusted due to the attacks on oil refineries. Suppliers and transportation methods are changing, with routes sometimes lengthening, which delays delivery times.
Serguei Frolov, Managing Partner at NEFT Research, shares a similar viewpoint. He firmly believes that there is currently no significant physical fuel shortage in the European part of Russia. He argues that fluctuations in fuel prices at gas stations primarily reflect the challenges faced by independent gas station networks, which are finding it increasingly difficult to procure free volumes at economically viable prices. Often, they are forced to buy fuel at 1.5 times or more than the current wholesale prices on the exchange, with Belarusian petroleum products making up the bulk of these transactions.
Frolov suggests that maintaining and escalating shortages this summer is quite possible, directly influenced by the same factors: the operation of oil refineries, logistics availability, and demand levels. Any irregular market situations or cutbacks in supply to the exchange and direct contracts will inevitably impact the price of wholesale batches and, consequently, retail prices.
It is also worth noting that the Ministry of Energy did not randomly announce the availability of fuel reserves. Oil companies and large traders hold sufficient stocks, while large and medium-sized gas station networks typically procure fuel in advance. Large-scale attacks on our oil refineries, which supply the domestic market, began in the second half of May. According to Reuters, production was temporarily halted or reduced at seven facilities. This means that less than a month has passed since the first strikes, and it is highly likely that the domestic market has yet to fully feel the decrease in supply, which may only manifest by the end of June. Nevertheless, the information environment has done its part in exacerbating the situation.
According to Sergey Tereshkin, General Director of Open Oil Market, the main risks of shortages are located in the southern regions, where production and logistical factors converge. In other regions, there are currently no risks of physical fuel shortages; however, overall sentiments are driving fuel prices higher. Gusev also highlights the role of negative expectations, stating, “We are inherently apprehensive about shortages. If, for instance, local disruptions occur, leading to a lack of something, panic spreads immediately across the entire market,” notes the expert.
There are sufficient fuel reserves held by oil companies, traders, and large and medium gas station networks.Tereshkin believes that, in a sense, the terminology used by the Central Bank is applicable here, as it not only provides calculations on inflation but also monitors observed and expected inflation. In the first instance, this pertains to consumers' perception of actual price growth, while in the second, it involves their expectations regarding future price dynamics. Currently, the observed and anticipated "fuel" inflation is at multi-year highs. This largely explains why Rosstat recorded such a significant price increase in its latest weekly report.
Energy expert Kirill Rodionov believes that Rosstat and the Central Dispatch Unit of the Fuel and Energy Complex should resume publishing data on the production of gasoline and diesel. This would help to somewhat reassure wholesale and retail consumers, even taking into account that actual fuel output will still play a decisive role in market dynamics.
Source: RG.RU
