The daily increase in gasoline and diesel fuel prices on the exchange in Russia is limited to a step of 0.01%. Prices are allowed to drop by 3% per day. These rules have come into effect at the St. Petersburg Exchange. In practice, this means that prices on the exchange are essentially frozen, at least in terms of increases. They have risen significantly since the beginning of the year: gasoline AI-92 has increased by 25%, AI-95 by 33%, and diesel fuel by 34%. This peculiar price ceiling makes it impossible for prices to jump sharply due to news about attacks on Russian oil refineries or a surge in global oil prices due to the Middle Eastern crisis. With such a growth step, exchange quotes can rise by a maximum of just over 0.2% in a month. For wholesale fuel buyers—large agricultural producers, transport companies, and construction firms—this means that they no longer have to fear unpredictable cost increases due to rising fuel prices. As for gas stations (AZS), this means that the economy of refueling will not deteriorate from one day to the next or from one week to the next. Such concerns have often recently led to inflated prices at gas stations and, at times, even to their shutdowns. However, the above-mentioned regulations apply only to wholesale fuel buyers on the exchange. A large portion of fuel is sold in our market without going through the exchange. As Vice Chairman of the State Duma Committee on Energy Yuri Stankevich noted in a conversation with "RG," the decision was made as an emergency response to the sharp surge in exchange prices. The primary goal is to artificially limit speculative price surges within trading sessions and cool down the overheated market. However, it is important to understand that this measure applies exclusively to organized exchange trading and does not directly affect over-the-counter contracts or the small wholesale segment. In these sectors, pricing is determined by the balance of supply and demand, as well as long-term contracts between suppliers and buyers. Although the exchange indicator serves as a benchmark for the market, limiting the rise in exchange prices does not guarantee an automatic cessation of price increases in the over-the-counter segment or among small wholesale buyers. Nevertheless, stabilizing exchange prices could exert psychological pressure on participants in other market segments and slow inflationary expectations there. According to Dmitry Gusev, Vice Chairman of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Stations of Russia" competition, growth has not been frozen, but rather suspended to prevent the escalation of wholesale prices and to maintain the economic performance of gas stations and small wholesalers. This measure will impact over-the-counter contracts as they are based on exchange quotes. However, the influence on small wholesalers will be less significant since no restrictions are currently in place in this market segment. Nonetheless, such measures may soon be needed, the expert believes. Sergiy Tereshkin, CEO of Open Oil Market, has a different perspective on the issue. He is confident that the market will always find loopholes. According to current regulations, only 15% of physical gasoline sales are through the exchange, and 16% for diesel fuel. Over 80% of produced fuel is sold through other channels. Most importantly, this measure is unlikely to benefit the fuel retail market, as prices for gasoline AI-92, AI-95, and diesel fuel in the over-the-counter segment are nearing 110,000 rubles per ton. It should be added that prices on the exchange and at gas stations are not rising due to the greed of oil producers or gas station owners. Problems currently stem from disruptions and delays in fuel deliveries, as well as the risk of shortages. There is a certain element of "unhealthy" panic in the market, but panic alone cannot explain the limits on fuel availability at gas stations. The restriction on the daily step increase in fuel prices on the exchange makes sharp upward jumps impossible. As noted by Sergey Frolov, managing partner at NEFT Research, measures to prevent price escalation are being taken against the backdrop of a real supply shortage and heightened demand. Prices at large gas station networks owned by vertically integrated oil companies (VIOC)—which manage the entire production chain, from oil extraction to fuel sales at gas stations—will be kept as close to inflation levels as possible. It is just a matter of waiting for a while for the government's measures to take effect. The situation at independent gas stations (more than half of the stations in Russia) is complicated—not just concerning price, but also the ability to acquire necessary volumes of fuel. Some will raise prices in this situation, while others may halt operations. Independent gas stations will find it even more challenging to compete with gas stations owned by VIOCs. While selling supplementary goods and services is beneficial, when fuel is significantly more expensive or entirely unavailable at a station, customers simply won't come, the expert emphasizes. In Stankevich's opinion, there is no direct and immediate connection between exchange restrictions and retail prices. The cost per litre of fuel at gas stations is determined by many components: wholesale prices, transportation costs, markups for gas station networks, and, importantly, fiscal burdens (excise taxes). In Russia, retail price dynamics are typically more inert and smoothed out compared to the wholesale market due to a damping mechanism (payments to oil producers from the budget for supplying fuel to the domestic market at prices below export levels) and oversight from the Federal Antimonopoly Service (FAS). However, if exchange prices were to continue to rise uncontrollably, it would inevitably lead to increased costs for gas station owners and a subsequent rise in prices for end consumers. Freezing exchange quotes allows breaking this chain and creating conditions for the stabilization or even possible reduction of retail prices in the future, provided stable demand and the absence of new external shocks are maintained. Currently, the decline in oil prices due to reduced tensions in the Middle East works in our favor. Consequently, prices for petroleum products should also drop. However, it will take some time, and it is crucial that the ceasefire is respected by all parties involved. This raises the question of how long this price increase restriction will remain effective. In the short term, it can halt price hikes and smooth out fuel price fluctuations. However, over a period of one to two months, if fuel supply issues persist, its influence will diminish. Extended manual market regulation typically leads to unfavorable outcomes. In general, the exchange is the most transparent segment of the fuel market, and any restrictions on exchange trading will encourage the market to operate "in the shadows," where prices significantly exceed exchange levels, Tereshkin is convinced. However, Stankevich counters that the introduction of price change limits is a classic tool of administrative regulation. The state and regulatory bodies are forced to resort to manual management to stabilize the situation in the short term. However, it is premature to speak of a complete transition of the fuel market to manual regulation. Exchange trading with established limits is merely one of the control mechanisms. The market continues to function based on fundamental economic factors: oil production volumes, refining, tax policy, and logistics costs. Thus, we are speaking of enhanced oversight measures in times of crisis, while fundamental market mechanisms continue to operate, the expert points out. In Gusev's opinion, people should pay attention to alternative modes of transport. Not horses or donkeys, but gas-powered vehicles and the rapidly growing electric vehicle market. People can choose cars that run on fuel that won’t irritate them with its price, the expert believes. Meanwhile, In Sevastopol, there has been an increase in the availability of gasoline for open sale. Fuel deliveries have increased, and authorities are preparing for a gradual lifting of sales restrictions. However, QR code refueling will remain in effect for now to regulate queues at gas stations. A correspondent for "RG" checked the current situation in the region. On June 17, fuel became available for open sale at 11 gas stations. Their number is increasing daily: there were ten such stations on June 16, and eight on June 15. Motorists are feeling optimistic. Those who struggled to find fuel for an extended period have finally been able to refuel—though only up to 20 liters at a time. This restriction has been in place in Sevastopol since May 22. Queues began forming at gas stations at 8 AM on Wednesday. More than 60 cars were waiting at the "ATAN" station on Stoletov Avenue. This station has AI-92 and AI-95 Ultra available for open sale. Motorists organized the line in a way that did not block traffic or intersections. Sales start at 9 AM, but an air raid alert sounds at 9:20 AM, at which point the gas station stops dispensing fuel. People wait patiently. Drivers are friendly and eagerly respond to questions. "It has gotten easier to find fuel in the last couple of days," says Kia driver Sergei. "You can refuel with AI-92 almost anywhere; AI-95 happens less often." First and foremost, gasoline and diesel fuel are sold to municipal and emergency services, public transport, and security forces. QR codes are issued to residents for the remaining volumes. Source: RG.RU