Ban on gasoline exports from Russia and working with oil cos to increase production enough to stabilize AI-95 market - Novak

MOSCOW. July 25 (Interfax) - The Russian government is working to stabilize the situation with price growth for AI-95 (RON 95) gasoline, Deputy Prime Minister Alexander Novak told reporters.

"We are working to ensure that the situation is stable. Our ban on exports [of all commercial gasoline] goes into effect on August 1. Also, the Energy Ministry is working constantly with companies to increase production volumes, refinery throughputs and get petroleum products shipped. These are industrial transport and logistics measures," he said.

Novak said he was sure these efforts would be sufficient. "Yes, I'm sure they will be enough. We have enough production, enough domestic consumption, because the situation is temporary," he said.

Novak said there had been no discussions regarding the allocation of a separate standard for AI-95 gasoline in the damper formula. "No, there were no such initiatives," he said.

He also said the government was not going to ban the export of diesel fuel, including winter fuel. "We are not going to ban the supply of diesel, since we are producing a lot of diesel and the situation is now very stable. I'm sure we're producing enough for the winter, but winter is a long way off," he said.

Gasoline prices have been rising virtually non-stop on the exchange since the beginning of June. The price of AI-95 has been above 70,000 rubles per tonne for several trading sessions on St. Petersburg International Mercantile Exchange (SPIMEX), approaching the highs seen during the 2023 crisis, when it topped 76,000 rubles tonne. The spread between AI-95 and AI-92 (RON 92) on the exchange is approaching 18,000 rubles based on the national index, which is not normal for the segment. Demand for AI-95 gasoline will continue to increase in July-August as the holiday period in Russia peaks.

Ministries hope that reinstating the ban on gasoline exports will help stabilize the situation. A decision has already been made on a ban in August. The Energy Ministry has also proposed extending the ban on gasoline exports into September-October.

The Federal Antimonopoly Service said last week that it intended to demand data from oil companies on the economic justification for increasing the wholesale cost of AI-95 gasoline. In addition, it recommended that work be done to increase sales volumes of AI-95 on the exchange, since a seasonal increase in demand for this type of fuel is currently being seen.

Fuel industry experts told Interfax that AI-95 gasoline supply to the Russian market had not kept up with growing demand in recent years, and this is the root of the problem.