27 Sep 2023 16:37

Novak: situation on domestic petroleum products market stabilizing, systemic measures will soon be adopted and will have long-term impact

MOSCOW. Sept 27 (Interfax) - The situation on the domestic petroleum products market is stabilizing, and systemic measures will soon be taken and will have a long-term effect, Russian Deputy Prime Minister Alexander Novak said during a meeting of Russian President Vladimir Putin with the government.

The ban on fuel exports since September 21 has led to an average 20% drop in exchange prices for gasoline and 16% for diesel, Novak said. Currently, there is a slight correction after the sharp drop. Meanwhile, the companies have determined the volume of diesel fuel supplies for September-November agricultural fieldwork.

In order to create economic incentives for the supply of petroleum products to the domestic market, the government is proposing a number of additional systemic measures, the Deputy Prime Minister said.

"The first is the adjustment of the damper parameters taking the current macroeconomic situation into consideration. This is an increase in the coefficient, which was reduced as of September 1. This will allow us to compensate for the difference between the export alternative and exchange prices in the domestic market and increase the efficiency of supplies to the domestic market [...]," he said.

"The second is the limitation of so-called 'gray exports' in order to prevent fuel from being secreted out of the domestic market by speculators. First, this involves an increase in the protective duty for those resellers who are not producers of petroleum products, but who buy them for resale and export. We will introduce a protective duty; we will increase it from 20 to 50,000 rubles per tonne," Novak said.

"I also consider it possible to introduce a complete ban on the export of any petroleum products that were purchased on the domestic market but not produced. That is, we will also limit the possibility of speculative export," he said.

Novak emphasized the importance of the Ministry of Energy working together with the Federal Tax Service and the Federal Customs Service to ensure monitoring of compliance with these requirements.

"We also need to control markup levels, including alongside the Federal Antimonopoly Service, at gas stations. Since the fall in stock prices should be reflected, especially, as I said, at independent gas stations," he added.

The government is also exploring the possibility of subsidizing the cost of fuel oil supplied to certain regions where the energy sector uses a high share of it, Novak said. "First and foremost, these are the Murmansk region and the Kamchatka Territory. Because of the increase in exchange prices, they [delivery prices] exceeded the average level that has developed over previous years. And for these regions, this is an additional budgetary burden that needs to be compensated, since, naturally, these prices are not taken into account in tariffs for consumers," the Deputy Prime Minister said.

"In general, the situation in the domestic market is stabilizing, and the operational measures taken are ensuring the restoration and stable operation of the small wholesale segment, independent gas station chains, and the work of agricultural producers," Novak said.

"In the near future, we will make a decision on the systemic additional measures that I mentioned - this will have a long-term impact on stability in the domestic market," he said.