Rosneft proposes six-month moratorium on reducing damper to zero - paper
MOSCOW. April 24 (Interfax) - Rosneft has proposed to impose a six-month moratorium on reducing the damper fuel subsidy to zero and eliminate the provision under which there are no payments at all if the cut-off price is exceeded for one type of fuel, either gasoline or diesel.
This proposal was made in a letter that the Russian oil company's CEO Igor Sechin sent to Prime Minister Mikhail Mishustin, national daily Kommersant reported on Wednesday.
Rosneft proposed to impose the moratorium for April-September "for a period of stabilization of the situation" on the fuel market. As an alternative, it proposed to widen the permitted range for deviation of wholesale prices so that the damper does not drop to zero.
The Finance Ministry said Rosneft's proposal "is under review," the paper reported.
The damper has dropped to zero only once, in September 2023 when fuel prices surged. At the time, the government resorted to banning gasoline and diesel exports for the first time. In March 2024, it again imposed a ban on exports, but only for gasoline.
In late March and early April diesel prices in the European part of Russia repeatedly neared the cut-off price for the damper of 66,600 rubles per tonne. The price growth was driven by damage inflicted by Ukrainian drone attacks at a number of major Russian oil refineries that forced them to reduce production. However, exchange prices for diesel started falling in the second half of April.
Based on current world prices for gasoline and diesel, as well as the U.S. dollar's exchange rate, damper payments for April-September could total 1.4 trillion rubles, or about 230 billion rubles per month, Kommersant reported, citing an estimate from Petromarket that is based on the assumption that the damper will not drop to zero in any month in this period.
The damper is paid out of Russia's budget as a subsidy to oil companies in order to hold down domestic fuel prices when there is a high export netback. But if fuel prices within Russia increase too much and deviate from the conditional prices of 58,650 rubles per tonne for gasoline and 55,000 rubles for diesel set in the Tax Code by more than 10% and 20%, respectively, on average for the month, the damper is not paid for that month.