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- Tank back: the authorities demanded that the gas station justify the increase in fuel prices
Tank back: the authorities demanded that the gas station justify the increase in fuel prices
Gas stations in the regions began to receive warnings from the Federal Antimonopoly Service due to unjustified price increases. The Ministry of Energy and the Antimonopoly service in the regions have begun network inspections amid rising fuel prices and supply disruptions. The government is preparing other measures, in particular, a complete ban on the export of gasoline and diesel by the end of the year. Whether enhanced monitoring will help stabilize the market situation and what other measures the government is preparing is discussed in the Izvestia article.
Network inspections amid rising fuel prices
The Ministry of Energy and regional departments of the Federal Antimonopoly Service (FAS) have begun sending requests to owners of gas station networks demanding to justify the increase in fuel prices. The agencies also request information on the availability of fuel reserves and on the facts of supply disruptions. This was reported to Izvestia by market participants. The editors also reviewed two such letters.
— Regional authorities (FAS and the Ministry of Energy. In recent weeks, representatives of gas station networks have repeatedly contacted representatives of gas station networks with requests for justifications for rising fuel prices or information about its reserves," Pavel Bazhenov, president of the Independent Fuel Union (NTS), told Izvestia.
On behalf of the FAS, the territorial bodies of the service monitor compliance with antimonopoly legislation in the fuel market, including by requesting data from gas station networks on pricing and fuel availability, the press service of the department confirmed to Izvestia.
Based on the results of the analysis of the information provided, decisions are made on the presence or absence of signs of violations of antimonopoly legislation, they said. For example, warnings were issued to owners of gas station networks in the Tver and Tyumen regions, the FAS added.
If the FAS considers the price increase economically unjustified, network owners face administrative fines, cost reduction orders, and even suspension of operations in case of systematic violations, said Vladimir Chernov, analyst at Freedom Finance Global. In the most serious cases, antitrust cases may be initiated if it is proved that the price overstatement was consensual or artificial, he added.
— The actions of regulators are understandable in conditions when individual gas stations are forced to stop or limit the supply of gasoline or are closed against a background of fuel shortage. Individual gas stations do have to raise prices above inflation due to market difficulties and rising wholesale prices. Not all fuel market operators have a safety margin that allows them to keep prices up and trade at a loss," Pavel Bazhenov told Izvestia.
At the same time, if at the end of the summer only small networks experienced difficulties with fuel supply, now the situation is becoming more complicated even for large backbone ones that have dozens of gas stations, he added. The Kirov, Nizhny Novgorod, and Kostroma regions are examples of regions where even such companies have found their work difficult, the expert noted.
Izvestia sent inquiries to the Ministry of Energy, oil companies and gas station networks.
What measures are the authorities taking?
The authorities are trying to prevent the price of gasoline in retail from rising above the annual inflation rate or to keep these figures close, Izvestia wrote. The mechanism is implemented through the pressure of regulators, primarily the Federal Antimonopoly Service, on oil companies. Such a system forces retail chains to hedge the risks of losses from the inevitable discrepancies. Therefore, prices do not decrease even when there are all prerequisites for this, the NTS explained.
— While large companies can afford to trade fuel at a loss for some time, compensating for losses through other types of activities (as well as through the sale of related products and services at gas stations), small ones are completely tied to wholesale prices and cannot "fall" below their level. As a result, they raise prices at their gas stations faster than inflation increases," said Valery Andrianov, associate professor at the Financial University under the Government.
Since the beginning of September, the wholesale cost of fuel has reached a historic high. According to the results of the auction on September 3, the price of Ai-95 for delivery to the European part of Russia reached a record 82.3 thousand rubles per 1 ton, and Ai-92 — more than 70.6 thousand rubles. As of September 29, the cost of Ai-95 dropped to 78.9 thousand per 1 ton, and Ai-92 rose to 74 thousand rubles, respectively, according to data from the St. Petersburg Stock Exchange.
For those gas stations that kept prices rising within the projected inflation range in September, the margin remains negative, said Pavel Bazhenov from NTS. The national average is about 4 rubles of loss per liter of both 92 and 95 gasoline, he added. At the same time, some non-network gas stations in the regions raised prices by about 10%, or by 5-8 rubles to the price list of network operators, the media reported in September. Such cases have been reported in the Tambov, Tver, and Lipetsk regions.
The situation on the fuel market
Russia has already faced similar problems, said Dmitry Tortev, a member of the expert council of the State Duma Committee for the Protection of Competition. This year, experts told Izvestia, the main causes of the crisis include an increase in domestic demand during the agricultural harvest and the holiday season, as well as planned and emergency repairs at refineries.
In 2023, the export ban was introduced at the end of September and lifted in the second half of November. The Ministry of Energy noted at the time that a fuel surplus had been created in the domestic market for two months, and the wholesale price of gasoline had significantly decreased. In 2024, the ban was introduced in March. It was originally designed for six months. However, as the domestic market became saturated with motor fuel, the authorities suspended this restriction on May 20. The relaxation continued until the end of July, but it was canceled in August, as fuel consumption in Russia began to grow faster than expected, which led to a sharp increase in wholesale fuel prices and the ban was extended until the end of the year.
— A number of factors have led to the current situation in the fuel market, and it is obvious that the government is preparing new measures. In the medium term, regulators may start discussing a system of export restrictions as a permanent measure, for example, when gas station prices rise above inflation, Dmitry Tortev suggested.
Earlier, Deputy Prime Minister Alexander Novak held a meeting with representatives of major oil companies. He listened to their reports on the current situation, sources in the industry told Izvestia. According to them, the outcome of the meeting was Novak's statement that the decision on the future of the domestic fuel market would be made by the "political leadership of the country." A few days after that, it became known that the Cabinet of Ministers intends to impose a complete ban on gasoline exports for all participants, except for supplies under intergovernmental agreements, by the end of the year. There will also be a ban on the export of diesel fuel for non-producers until the end of the year. The ban is currently in effect until September 30th. Therefore, the new resolution should be published in the coming days.
Everyone understands that the decision to ban the export of gasoline and diesel is forced, said Yuri Stankevich, Deputy Chairman of the State Duma Committee on Energy.
— The directive restriction of supplies abroad in the context of sanctions will increase pressure on the financial performance of the oil sector. According to forecast estimates, the profit of our WINCS (large oil companies) at the end of the year will be twice as low as in the previous period," the deputy noted.
This time, unscheduled repairs at the refinery led to risks of gasoline shortages in the domestic market, said Sergey Tereshin, CEO of Open Oil Market. As a result, if earlier the export ban simply indicated the need to "hold on" to price increases, now it is used to fill the domestic market.
However, an export ban will not solve the problem, the expert believes. The fact is that in the gasoline market, the capacity surplus even in normal times was no more than 15% (against 50% in the diesel market), so it will have to saturate the domestic market, including through imports, he believes. In particular, we may be talking about supplies from Belarusian refineries, which are facing a capacity surplus after the loss of the European market.
To solve the problem in the short term, it is necessary to stabilize the wholesale market by increasing supplies to the domestic market and expanding fuel sales through the stock exchange, Vladimir Chernov noted. It is also possible to consider a temporary reduction in excise taxes or subsidy mechanisms for independent gas stations, which are most vulnerable to price fluctuations, the expert believes.
In the medium term, it is important to build long-term direct contracts between refineries and networks, as well as create additional fuel reserves to smooth out local disruptions and strengthen the protection of gas stations, the specialist concluded.
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