2 Apr 2024 12:55

Russian oil refining capabilities make it possible to provide fuel to domestic market as well as to neighboring countries - Energy Ministry

MOSCOW. April 2 (Interfax) - Russia's oil refining capacities make it possible to not only fully satisfy the needs of the domestic petroleum products market, but also to supply the markets of neighboring countries, the Russian Energy Ministry told Interfax.

Following a meeting on the petroleum products market on March 22, the government said that Deputy Prime Minister Novak had instructed oil companies and Russian Railways to ensure uninterrupted exports of petroleum products as well at loading at refineries in accordance with the schedule amid growing spring demand.

Novak said that oil companies must maximize supplies of gasoline and diesel fuel to the domestic market and fully meet its needs, even if it means reducing export supplies, the minutes of the meeting show.

Last week, the Deputy Prime Minister, when asked whether it makes sense to ban the export of diesel fuel, answered in the negative. "No. We produce twice as much diesel fuel than the domestic market consumes, and there is simply nowhere to put it. The situation on the petroleum products market is stable. All the measures put in place by the government are ensuring a stable supply on the domestic market and a stable price situation," he said.

On Tuesday, Novak will hold a new meeting to discuss the oil products market, Interfax sources said.

An Energy Ministry representative said that the utmost attention is paid to the balance of fifth environmental class motor gasoline, the type consumed in the Russian domestic market. "Since the beginning of the year, the accumulated production of motor gasoline is at approximately the same level as it was in the same period in 2023. Moreover, thanks to the preventive measure to ban gasoline exports, shipments to the domestic market are approximately 10% higher than they were in the first quarter of 2023, which allows us to saturate the market and form the necessary fuel reserves before the spring period of increased demand and refinery maintenance," the Ministry said.

Commercial gasoline reserves at refineries and oil depots currently sit at about 2 million tonnes, which is higher than in similar periods in previous years, the Ministry said. Diesel fuel production is significantly higher than the domestic market requires, and shipments to domestic consumers have increased since the beginning of the year by 15% compared to the beginning of 2023.

"Considering the effective operation of economic mechanisms to support the production of petroleum products and their sale on the domestic market, the fuel supply situation is stable," the Energy Ministry said.

Meanwhile, exchange prices for petroleum products swung to growth this week after several days of declines in the prior week. The agency's sources in the fuel market said that growth of prices for oil products on the SPIMEX is related to the start of spring seasonal demand for fuel. Furthermore, market participants express fears that fuel production in the country will be reduced due to the consequences of drone attacks on refineries. In addition, a number of refineries are due to undergo spring scheduled maintenance, which may also affect overall fuel supplies.

Russia has a ban on gasoline exports from March 1 through the end of August.

According to the text of the minutes of the Novak meeting, FAS, Russian Railways and SPIMEX should work on the issue of granting a supplier the right to reject an application for the supply of exchange-traded petroleum products if, according to information from Russian Railways, there are no exports on public or non-public tracks.

In has been recommended that SPIMEX, in coordination with the FAS, send to the Central Bank amendments to the rules of organized trading in the "Oil Products" section to set the rates for excessive idle time of tank cars at 8,000 rubles per day, starting from 11 days of excessive idle time. Now for more than two days of idle time the penalty is 2,000 rubles per day, more than five days - 4,000 rubles per day, more than 10 days - almost 8,000 rubles per day.