Page 87 - RusRPTJan22

to Ministry of Energy statistics, gasoline shipments to the domestic market reached 33.3mnt in 11mo21, which is 1.5mnt, or 4.7%, higher than in the same period of 2019.
Diesel fuel supplies increased to 35.9mnt (up 1.4mnt, or 4%, from the same period in 2019). Demand for fuel is growing against the background of increasing retail prices. On 29 November, gasoline and diesel fuel at gas stations had risen in price by an average of 8.5% YTD.
At present, the authorities are discussing changing the parameters of the damper, which compensates oil companies for some of the losses from restraining prices at gas stations and thereby helps to slow down their growth in case of fluctuations on the market.
Analysts have observed some misbalances in the domestic motor fuel market this year, which are continuing. The domestic price of gasoline in central Russia is some $200/t below the export netback for gasoline. Analysts calculate that this discount is not sufficiently covered by the damper subsidy, which at the moment might stand at some $170/t.
This would provide an incentive to redirect gasoline to export and create upward pressure on domestic prices, although according to the data from CDU TEK, domestic gasoline supplies are at elevated levels now, with retail premia for gasoline close to historical lows.
Analysts estimate that in 2022 (if there are no changes to the damper mechanism), the negative internal market premium of $84/t in Central Russia will be offset by the damper of $142/t. Above that, we think that the retail premium might add some $39/t to retail sellers.
Arctic LNG 2 has signed loan agreements, finalising all parts of its project financing structure. The maximum loan amount under the agreements is €9.5bn for up to 15 years. Up to €2.5bn might be provided by Chinese institutions (including the China Development Bank and the Export-Import Bank of China) and another €2.5bn by OECD banks (including the Japan Bank for International Cooperation (JBIC)). Arctic LNG 2 has also signed agreements to receive up to €4.5bn from a syndicate of Russian banks. The total amount of debt financing received by the project is in line with the initial planned capital structure (€9.5bn, or $11bn). However, back in April management guided for an equal split in the financing between Russian, Chinese and Japanese/European financial institutions, while the final structure includes more financing from Russian banks. All in all, we treat the news as neutral.
Europe will create its own strategic gas reserves in order to hedge against future gas shortages, European Energy Commissioner Kadri Simson
87 RUSSIA Country Report January 2022 www.intellinews.com