What will happen to prices at gas stations after the attacks on Russian refineries? Analyst Bazhenov: If attacks on refineries continue, Russia will have to buy gasoline 03/22/2024, 15:36

Situation at the refinery after drone attacks

Load rate of primary oil refining facilities (separation of associated gases from oil and distillation) In Russia, there was a 7.5% decrease compared to the beginning of the month between 14 March – 20 March 2024, Wrote Kommersant, with reference to Reuters calculations.

Against the background of drone attacks on the infrastructure of Russian refineries (oil Refineries) processing reached 0.69 million tons per day.

According to Reuters estimates, the expected decrease in the production of gasoline and diesel fuel at plants in Nizhny Novgorod, Ryazan and Syzran could amount to 5.8% and 6.6% of total production in the Russian Federation. This deficit can be compensated by other refineries with capacity reserves.

At the same time, wholesale prices of gasoline and diesel fuel continue to increase in Russia. With data St. It is traded on the St. Petersburg International Commodity and Raw Materials Exchange. (SPbMTSB)On March 22, the price of one ton of AI-92 gasoline exceeded 54.1 thousand rubles, the cost of one ton of AI-95 is 66.9 thousand rubles, and summer diesel fuel – 66 thousand rubles. per ton. As of March 11, these figures were 46.9 thousand rubles and 58.7 thousand rubles. and 60 thousand rubles. per ton respectively.

A drone attack on a refinery in Nizhny Novgorod took place on March 12, followed by an attack on an oil refinery in Ryazan the next day and an oil refinery in Syzran on March 16. On March 20, the head of the Ministry of Energy Nikolai Shulginov said that the annual volume of oil refineries in Russia planned It is at a level close to last year’s figure of 275 million tons.

“There is potential to increase fuel production in refineries where production has not been halted. “We are consulting with businesses to adjust the planned repair program at refineries in connection with incidents at a number of plants,” he said.

Should we expect famine?

Industry experts believe that the production volumes of gasoline and diesel fuel in Russia exceed their consumption, and against the backdrop of rising wholesale prices, retail prices at gas stations should not increase if the situation in refinery operations remains at the current level.

“On the one hand, we see our stock prices rising, but those prices are rising largely in anticipation of our overall production volume potentially falling. So far, the total trading volume on the exchange is completely normal,” said Grigory Bazhenov, head of the analytical center of the Independent Fuel Association, in an interview with socialbites.ca.

The expert stated that in addition to the expectations of a decrease in fuel production, foreign exchange prices also increased with the start of the season due to high demand and purchases related to the start of the planting season.

“If the existing damage turns out to be extremely significant and at the same time its elimination will take a lot of time, drone attacks will intensify and the damage will expand, then other difficulties will arise. But we cannot talk about the federal deficit,” Bazhenov said.

Igor Yushkov, a leading analyst of the National Energy Security Fund, notes that the general situation is pushing up wholesale prices of motor fuel: the price of gasoline has already increased, and he admitted that prices have also begun to rise on the news of the decline in the production of diesel fuel.

“Everyone sees that Ukraine is deliberately targeting oil refineries. It’s hard to say how much was removed from production, but there was some damage. The government naturally convinces everyone that there is no shortage and nothing to worry about, but the stock market is still quite psychological about it. The price could have increased even if there was no shock due to the start of the automobile season, Yushkov told socialbites.ca.

In his estimation, the government will try to dampen the excitement primarily through verbal interventions and, if necessary, propose some specific plans to stabilize the situation in the market and sign informal agreements with oil companies to keep retail prices on gas. stations.

Bazhenov believes that if the worst-case scenario occurs and the damage to Russian refineries continues, gasoline and diesel fuel will have to be sought abroad, but this is not difficult to do:

“In principle, there are Belarusian factories ready to carry out this supply. Capacities will be loaded and the opportunity to purchase this fuel will arise. I exclude the possibility of a deficit on a federal scale. However, local supply disruptions are also possible.”

The expert said this could be due to logistical problems, including overloading of railways.

What does the price consist of?

Alexander Frolov, Deputy Director General of the National Energy Institute, explained that the retail price of motor fuel at gas stations depends on three factors:

  • most affected by the financial component (taxes, duties and excise duties),
  • later – agreements between the government and oil companies to maintain retail prices within inflation limits,
  • and third, the wholesale price.

“The current situation has the biggest impact on wholesale prices. Although the incident does not affect the supply on the stock exchange, quotations are increasing. Market participants rushed to the stock market to stock up just in case. Panic basically means irrational fear, but it’s not in short supply. Despite all the blows, the production volume fully meets domestic demand, Frolov told socialbites.ca.

42-45 million tons of motor gasoline are produced annually in Russia, and more than 90% of them are not consumed. The expert is confident that the current damage to the infrastructure will not be able to shake this surplus.

What are you thinking?

Following drone attacks on Russian oil refineries in March, wholesale prices of gasoline and diesel fuel increased and refinery production decreased by 7.5%. Market experts explain the increase in prices with psychological factors and the onset of seasonal demand, hoping to prevent the increase in retail prices at gas stations. Whether to expect fuel shortages in the country if drone attacks intensify – in our material.



Source: Gazeta

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