Gasoline stock prices in Russia soared to an all-time high

Gasoline prices in Russia have reached a historic record. On Wednesday, the price of a ton of AI-95 fuel rose by 1.6% to 60,436 rubles, according to trading results, according to data from the St. Petersburg International Trade Exchange. This is 7 rubles more than the previous historical maximum, which was set in August 2021.

Gasoline prices started to rise steadily a month ago. Already on April 18, the cost of a ton of fuel was 51,499 rubles. This means that the stock price of the AI-95 has increased by 17.4% during the month.

The cost of AI-92 gasoline increased by 463 rubles per ton (+0.9%) on Wednesday to 52,780 rubles. This is the highest value since November 2021.

Market demand for gasoline remains “pretty flat,” market participants told Reuters. According to them, the price of fuel is rising due to reduced supply from producers.

“We are not seeing an increase in the number of customer complaints. Prices are rising because there is not enough supply,” one trader told the agency. In addition, the cost of fuel is rising due to restrictions on the sale of small batches of gasoline at regional oil depots, the source added.

Wholesale gasoline prices are rising due to the decision of the Russian Ministry of Finance to reduce payments to oil companies from the budget, compensating for the difference between the cost of gasoline on the domestic and foreign markets. At the end of April, Finance Minister Anton Siluanov proposed halving the silencer for gasoline from July 2023 to July 2024. According to the minister, after the loss of Western markets, the compensation goes directly to the refinery’s margins.

“In the West, we made up for the difference in high prices [из бюджета]at low prices in the West, the oilmen paid extra [в бюджет]. There are no western markets now. The cost of petroleum products in Western markets was calculated from the Urals, now with the Urals it is also not clear what kind of discount exists, how to calculate it correctly. That’s why today the shock absorber actually goes to the margins of oil refineries. The refinery’s margin today is 8,000 rubles per ton, previously it was less than 2,000 rubles per ton. If you look at where it comes from – because of the shock absorber. It turns out that we pay the margin to refiners from the budget,” Siluanov said (quoted from Interfax).

As a result, according to the Ministry of Finance, payments to oilers from the budget will decrease by 30 billion rubles a month.

In 2021, oil companies received 674.5 billion rubles from the budget for the fuel shock absorber, and in 2022 – 2.16 trillion rubles.