Russian oil companies are forced to sell gasoline at a loss

Oil workers in Russia began to sell gasoline at the exchange at a loss, estimated by experts “analysis of commodity markets”.

So, for the week from 13 to 19 April, the price of AI-92 at the St. Petersburg international Mercantile exchange (SPIMEX) fell nearly 11%, or 4.2 thousand rubles, and on Monday, April 20, made up 35.77 thousand rubles per ton (in the European part of Russia), RBC reports.

Fuel prices dropped due to a sharp drop in demand. According to Reuters, sales at gas stations fell by about half (from 30 to 70% in different regions). In Russia, a growing number of cases of coronavirus, causing large cities a few weeks are quarantined, car traffic fell.

As analysts of the savings Bank Andrey Gromadin, in such market conditions, manufacturers of fuel ready to go on lowering wholesale prices and agree to an additional discount on the stock exchange.

The main cause of negative margin on gasoline at the wholesale market — the growth of payments on the damper, explains chief economist at VYGON Consulting Sergey Ezhov.

While the costs of companies, which include excise tax payments to the budget at the damper (the mechanism of stabilization of fuel prices on the domestic market), VAT and mineral extraction tax, amount of 38.07 thousand rubles per ton, said the CEO of “Analysts commodity markets” Michael Turukalov. Thus, according to him, the company will receive a net loss of approximately 2,3 thousand roubles for ton of AI-92 gasoline.

Recall that in late March, the newspaper Kommersant warned that the Russian fuel market can return in 1990-e years, having begun importing gasoline from abroad. Currently, gasoline in Europe was much cheaper than in Russia, because of fallen oil prices. The Russian oil companies can’t reduce the price in the country, as pay in the budget of deductions on the damper.

The mechanism of the reverse excise (damper) oil operates in Russia since 1 January 2019. It should neutralize the negative effect of the abolition of export duties on refining margins. The purpose of the damping mechanism to stabilize prices for gasoline and diesel fuel on the domestic market. Under this mechanism, the oil companies pay to the state, if the internal market becomes a premium, and therefore can not reduce prices at the gas station. If the internal market is a discount compared to the exports, the budget pays companies to not raise prices.

Experts believe that the damper was not designed for such a low price and needs to be adjusted, although this will lead to lower revenues. However, the Finance Ministry told the publication that now this is not an option.

We add that, according to Rosstat, consumer prices on gasoline in Russia on average from 6 to 12 April decreased by 0.1% as a percentage of the previous reporting period, after has not changed for 10 consecutive weeks.

As a whole, indicates Rosstat, on April 13 the average consumer price of 1 liter of gasoline dropped 4 cents (on April 6) to 44.88 ruble. During the reporting period, the national average cost of AI-92 gasoline dropped 4 cents to 42.45 rubles. The price of gasoline AI-95 decreased by 4 kopecks to the ruble 45.88. Gasoline AI-98 has fallen in price by 1 penny to 52.07 of the ruble. While a liter of diesel fuel according to 13 of April in the average cost from 47.84 rubles — in comparison with 6 APR it the price dropped to 7 cents.

Meanwhile in some countries-oil producers petrol is cheaper than Russian. So, for example, in Kazakhstan, according to on April 13, a liter of 95-octane gave (in recalculation on the Russian currency) 29.92 ruble and the U.S. state Ohio gasoline is now worth 91 cents per gallon (3.78 liters), that is, it sells for 18 cents or 24 rubles. Although in the whole United States per liter gave almost 43.5 per ruble. And the cheapest gasoline in Venezuela — 13 April, it cost 4 cents per liter, and in Iran — 6.74 ruble.

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