Page 6 - FSUOGM Week 30 2021

FSUOGM COMMENTARY FSUOGM

Russia raises spectre

of gasoline export

ban again

Russian wholesale gasoline prices are once again soaring, raising the

prospect of further regulation if not a full-on export ban

RUSSIA RUSSIA’S energy ministry has once again raised more into the budget when indicative domestic
the prospect of imposing a ban on gasoline pump prices are higher than export netbacks.
WHAT: exports, following a steep spike in wholesale Conversely, they can collect a subsidy when the
Russia is considering a prices. situation is reversed.
ban on gasoline exports The process of introducing the ban will begin However, the mechanism also means that
after a spike in wholesale if gasoline prices on the St Petersburg Interna- independent fuel retailers cannot pass high
prices. tional Mercantile Exchange (SPIMEX) do not wholesale prices on to consumers, and many
ease back from record levels, Russian Energy such operators have been loss-making for much
WHY: Ministry Nikolai Shulgnov said on July 22. The of this year. The Russian Fuel Union that repre-
Rising international ministry will also consider signing agreements sents independent filling station operators has
prices and growing fuel with oil companies on regulating volumes and warned repeatedly that many of its members are
demand at home are prices in the wholesale market. It may also at risk of bankruptcy.
behind the price growth. require oil companies to increase how much
gasoline they have to sell at SPIMEX to 15%. Further wholesale requirements
WHAT NEXT: Wholesale prices has seen a near unprece- Russia is likely to consider a ban on gasoline
The energy ministry dented rally in recent months as a result of rising exports as a last resort. However, the government
is unlikely to resort to international oil prices and increased summer had already drafted a decree on this temporary
a measure as drastic demand for motor fuels. Pump prices remain measure in April anyway, to have it ready in the
as a ban, but might low, however, owing to the damper mechanism event of an emergency. In May, Deputy Prime
agree to increased sale in Russia’s oil taxation. Introduced after a spike Minister Alexander Novak said the ban would
requirements. in prices in 2018, this mechanism gives suppli- only be introduced if urgently needed, describ-
ers more incentive to keep costs for motorists ing it as an “extreme” measure.
low. Under this mechanism, suppliers must pay A more likely prospect is greater price

P6 www. NEWSBASE .com Week 30 28•July•2021