Oil refining margins thin but not critical; shift to 100% duty on fuel should be kept - ministry
MOSCOW. Dec 26 (Interfax) - Oil refining margins in Russia have narrowed from 2,800 rubles per tonne to 800 rubles per tonne, but are not critically low, Deputy Energy Minister Kirill Molodtsov told journalists, adding that the 100% export duty on fuel oil should not be canceled.
"Right now the average return on each tonne of refining is no comfort to the sector, it comes to about 800 rubles per tonne. Initially in 2012-2013, this parameter was located in the range 2,200-2,800 rubles per tonne," he said.
"This issue was discussed at a meeting of the government commission on the fuel and energy complex in December. Overall, it did not trigger feverish discussion. Agreement was reached for detailed monitoring of the current situation, to watch the first quarter of 2017," he said.
"The zones of our supervision will be the regions of Western and Eastern Siberia on volumes of refining and consumption. We will pay attention to projects in Central Russia: this is the Samara refining hub. Much will depend on the current model used by our major companies," he said.
Meanwhile, no one is planning to cancel the scheduled shift in 2017 to a 100% export duty on fuel oil, which has been proposed to support individual refineries that are not part of vertically integrated oil companies and cannot compensate shrinking returns on refining using higher returns on crude oil production. "What is the point of that? These are risks faced by owners and shareholders. Everyone had the information that a 100% export duty would be introduced. They chose this niche themselves. Our goal is not to support everyone in everything. I know that difficult situations occur, but they [the independent refiners] are nonetheless operating," Molodtsov said.
"I do not see as a goal the revision of the 100% export duty on fuel oil, if we are actively moving away from that. The goal is to receive a product that we can consume. Fuel oil is an intermediate product. Modernize, become a secondary processor, achieve higher-yield-from-crude processes," he said.
