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this year caused consternation amongst Russian consumers who complained about the issue bitterly during president Vladimir Putin annual phone in “meet the people” press conference earlier this year.The current prices of gasoline now needs to be rolled back to June levels, while the companies will also increase domestic motor fuel supplied by 3% year-on-year as of 2019. VTB Capital calculated, based on Thomson Reuters Kortes data, that the average wholesale diesel price in the Central Region is currently 8% higher than it was in June, while the wholesale gasoline price is 3% lower. "This implies that the internal market premiums for gasoline and diesel are -$48/tonne and $1/tonne, respectively," VTB notes, and sees the agreement between the state and the companies as effectively moving away from the market pricing basis. However, as the pricing of oil products on the domestic market was already over-regulated with the recent passing of the oil sector tax reform , the bank deems the news as not market-moving for the oil stocks.
Oil companies have reached an agreement with the government to freeze wholesale gasoline and diesel prices at the June level and increase supplies to the domestic market 3% YoY, Kommersant reports. Wholesale and retail prices might increase at the rate of inflation from 2019. The agreement is to be signed in the next 24 hours and to come into force from 1 November to 31 March 2019 (although it might be extended thereafter. Rising gas prices has been a political problem for Putin and driving inflation up.
Russia expects its global market share in liquefied natural gas (LNG) to stand at 15% by 2025 , Energy Minister Alexander Novak said on October 24. Global demand for LNG is expected to double by 2035 and reach around 600mn tonnes, with Asia as the main driver, Novak said.
Russia's state-owned natural gas monopoly Gazprom is challenging a $6bn fine levied by the Antimonopoly Committee of Ukraine in international arbitration courts as the legal battle between the two continues, the Russian company said in a statement on October 25. "Gazprom, in accordance with UNCITRAL arbitration rules, has initiated an arbitration settlement against Ukraine with the goal of safeguarding its interest on its territory in connection with Ukraine, in the form of the Antimonopoly Committee, has groundlessly and unjustly levied a fine against Gazprom amounting to more than $6bn including penalties for supposedly abusing its monopoly position on the Ukrainian gas transit market," the statement reads. In October 2017, the Kyiv Economic Court authorised to collect from Gazprom fines and penalties for the total amount of UAH172bn that the Antimonopoly Committee imposed earlier on Gazprom. In January 2016, the Antimonopoly Committee fined Gazprom UAH85.966bn for abusing its monopoly on the market of transit of natural gas through Ukraine during the period of 2009-2015. The new legal battle between Gazprom and Russia is unfolding against a background of February's ruling of the Stockholm arbitration, according to which Gazprom must pay Naftogaz a total of $2.6bn , ending a four-year legal battle over gas supply contracts. On October 1, Ukrainian President Petro Poroshenko said that he is confident that all the funds won by Ukraine in courts against Russia will be returned to the Ukrainian state.
OPEC raised its forecast for the production of liquid hydrocarbons in Russia in 2018 from 11.15mn barrels per day to 11.19mn, in 2019 from 11.17mn barrels per day to 11.19mn. October report published on the organization’s website. Russian oil companies have the potential to further increase production by developing new fields, according to an OPEC report.
89 RUSSIA Country Report November 2018 www.intellinews.com