Page 13 - FSU OGM Week 26

FSUOGM POLICY FSUOGM

Russia mulls lifting fuel

import ban early

RUSSIA RUSSIA’S Federal Antimonopoly Service (FAS) more fuel to the domestic market to ensure this
has proposed the early lifting of a ban on fuel demand is met. The ministry has said it will con-
The ban came into imports, its head Armen Khanyan told Interfax sider lifting the import ban early. But doing so
force on June 2. on June 25. now would be premature, it noted in a statement
The ban came into force on June 2, and was on June 25, as fuel demand in Russia this month
aimed at shielding Russian refiners from for- is still 10-15% lower than the level a year ago.
eign competition. Russian fuel prices remained “The [ministry] continues to monitor the
comparatively high during the height of the feasibility of maintaining the import ban and,
coronavirus (COVID-19) pandemic, despite under normalising market conditions, will con-
a steep fall in demand, because of a so-called sider the possibility of early termination of the
“damper mechanism” in Russian oil taxation. restrictions,” it said.
This resulted in European suppliers seeking to Russia typically imports hardly any gasoline,
capture higher-margin sales in Russia, hurting with volumes amounting to only 1,000 tonnes
domestic refiners. last year, according to customs data. More die-
The ban had been due to remain until Octo- sel is imported, with shipments reaching 62,000
ber 1. However, Khanyan said even though the tonnes in 2019.
embargo had successfully supported domestic The “damper mechanism” was introduced
suppliers, its early termination should now be after a series of spikes in Russian fuel prices
considered. The government decree imposing in 2018. It compensates producers for sell-
the ban provides an option for its early lifting on ing fuel domestically, when international oil
July 15. prices are high, but when prices are low, as
Russian fuel demand has recovered from they were during the crisis, it requires produc-
record lows in April, and the energy ministry ers to pay extra tax on domestic sales, prop-
has called on suppliers to cut exports and send ping up prices. ™

Week 26 01•July•2020 www. NEWSBASE .com P13