Russia's Energy Ministry drafts agreements with oil cos on fuel supplies to domestic market - sources
MOSCOW. April 21 (Interfax) - Russia's Energy Ministry has drafted agreements with oil companies on supplying petroleum products as part of measures to stabilize and develop the domestic market, sources familiar with the situation told Interfax.
Interfax's sources said that a government resolution must precede the signing of the agreements.
The agreements envisage that the Energy Ministry will recommend to companies planned production volumes and shipments to the domestic market, exchange sales volumes, and export volumes of Class 5 gasoline and diesel fuel.
Companies in turn undertake to implement the recommendations by taking into account the availability of production and logistics capabilities and corresponding demand on the domestic market.
Companies will be required to prioritize fuel supplies to the domestic market through all distribution channels.
Oil producers will be required to ensure that retail prices for gasoline and diesel change in line with inflation according to the Federal State Statistics Service (Rosstat) this year by taking into account changes in the fiscal burden in terms of VAT and excise taxes. A separate clause specifies the condition for ensuring break-even sales of petroleum products in the Far East regions.
Oil companies will have the right under the agreement to discuss with the Energy Ministry amendments to recommendations on planned fuel production and sales volumes in the event of a force majeure.
The Energy Ministry and the Federal Anti-monopoly Service would monitor implementing the recommendations. The signed agreement will be in effect until the end of 2026.
The Energy Ministry has sent monthly recommendations to oil companies regarding fuel supplies to the domestic market in the past. Companies took these recommendations into account when implementing their business plans. Now, the ministry's recommendations have greater force, the sources said.
The Energy Ministry is looking at the possibility of concluding an agreement with oil companies to increase fuel supplies to the domestic market, and the amount will correspond to its needs, Deputy Prime Minister Alexander Novak has said.
As reported, since the end of February, exchange prices for fuel in Russia have been rising due to the worsening situation in the Middle East. Amid price increases, SPIMEX introduced a strict limit on the upward price step for fuel during trading (0.01%). At the same time, seasonal demand for petroleum products traditionally began in April within the country. Russian refineries have been attacked by drones and are facing forced unscheduled repairs, and planned refinery maintenance also starts in the spring months.
To support the domestic petroleum products market, the Russian government introduced a complete ban on gasoline exports from the beginning of April until the end of July, extending it to producing companies. Only supplies under intergovernmental agreements are exempt from the restrictions. Also among the measures for the domestic market, a discussion is underway to extend the moratorium on reducing the fuel damper to zero.
