MOSCOW, February 28 The planned temporary ban on gasoline supplies abroad will not significantly affect the profits of Russian oil companies, since export volumes have traditionally been small, and some Lost profits for the business will be compensated by the fuel damper, said Sergei Kolobanov, Deputy Director of the Center for the Economics of Fuel and Energy Sector Industries of the Center for Economic Development.
The Russian government plans to introduce a six-month ban on the export of gasoline from Russia from March 1, a representative of Deputy Prime Minister Alexander Novak confirmed to reporters on Tuesday.
“The government of the country, in order to avoid a situation that could lead to an increase in the cost of fuel, is introducing an export ban in advance, that is, a measure that potentially saturates the domestic market with additional volumes of gasoline. At the same time, the profits of oil companies will not decrease significantly, since the volumes of gasoline exports are insignificant (less than 15 % of production volume), and the damper tax mechanism compensates producers for most of the “lost profits” with an alternative option for selling fuel to export,” Kolobanov commented.
Commenting on the need for new systemic measures to stabilize fuel prices, Kolobanov said that the current “half-manual” regulation in the current situation is still optimal.
“Our economy and the oil sector in particular have experienced too many “black swans” in recent years. These include an embargo, a price ceiling, technological sanctions, a restructuring of logistics, the search for and conquering new markets, and changes in price formation points, problems in the calculations, obligations within OPEC+, as well as the rapidly developing green agenda. While the new realities have not yet settled down, new shocks are possible, for example, associated with secondary sanctions,» the expert believes.
The damping mechanism was created to control domestic fuel prices. If the export price of gasoline and diesel fuel is higher than the conditional domestic Russian price, then the state compensates companies for part of this difference so that they do not increase prices in the Russian Federation. And if Russian prices are higher than export prices, then oil companies share with the state part of their profits from domestic fuel sales.
Exchange prices for fuel in Russia last year remained at record levels for several months. Growth in retail prices also accelerated significantly. Against this background, the Russian Cabinet of Ministers introduced a ban on the export of petroleum products from September 21. The ban on the export of gasoline was lifted on November 17, summer diesel — from November 22, and the embargo on winter diesel was not lifted.