10 Apr 2024 18:45

Deputy PM Novak instructs oil companies to maximize fuel supplies to domestic market and exchange, actively fill refinery capacity

MOSCOW. April 10 (Interfax) - Russian Deputy Prime Minister Alexander Novak has instructed oil companies to maximize supplies of gasoline and diesel fuel to the domestic market and for trading on the exchange, as well as actively fill refinery capacity released owing to timely exports of petroleum products.

The government's press service, following a regular meeting regarding the situation on the domestic petroleum products market involving the directors and representatives of the Energy Ministry, Federal Anti-monopoly Service, Agriculture Ministry, Transport Ministry, Finance Ministry, Russian Railways, St. Petersburg International Mercantile Exchange (SPIMEX), oil companies, and State Duma deputies, said that the respective parties discussed the balance of supply and demand and supplies of petroleum products to various regions for April-May 2024, as well as analyzed the dynamics of prices for diesel fuel for agricultural producers.

Russian Railways and the oil companies reported on the situation regarding fuel transportation on the domestic market.

The Energy Ministry said that the situation remains stable regarding supplying fuel to the domestic market, the press service said.

After the previous meeting on the petroleum products market called by Russian Deputy Prime Minister Alexander Novak, the Ministries of Energy and Agriculture, as well as the Federal Antimonopoly Service, have been tasked with analyzing how diesel fuel prices changed in the 2021-2023 spring sowing periods, taking into account the level of inflation, and including a comparison with changes in grain prices to determine the "target level" of diesel fuel prices for agricultural producers in 2024, an informed source told Interfax.

The Deputy Prime Minister instructed the departments to compare small wholesale prices for petroleum products with the prices of vertically integrated companies to identify unreasonable margins that arise when fuel is supplied to agricultural producers.

The departments have also been instructed to analyze the pricing of components for high-octane gasoline in order to determine factors leading to unreasonable price increases.

In addition, according to market sources, the agencies are discussing the possibility of returning to the use of monomethylaniline (MMA) in gasoline production, which was banned 8 years ago. Now, methyl tert-butyl ether (MTBE) is used as a high-octane gasoline additive; a return to MMA would reduce fuel costs.

Oil companies were supposed to maximize the supply of gasoline and diesel fuel to the domestic market and the exchange, ensuring priority over exports, and minimize the buying and selling of petroleum products on the exchange from each other by entering into direct contracts based on the exchange price formula.

SPIMEX, together with the FAS, was recommended to analyze the reasons for agitated demand for petroleum products on the exchange and prepare proposals to prevent unjustified price increases and optimize trading.

The FAS, the Energy Ministry and the Federal Tax Service together with the authorities of Russian constituent entities were instructed to analyze the reasons for price increases in the small wholesale segment above inflation by region, especially in the Siberian Federal District.