End users are defined as gas stations (GS), processing enterprises, and large companies with substantial vehicle fleets (e.g., transportation, mining, agriculture, etc.).
Brokers will be allowed to conduct transactions on behalf of third parties; however, their numbers are limited to trading participants designated as members of the exchange within the "Oil Products" section. Should it be discovered post-transaction that there was an attempt to resell fuel purchased "for personal needs," that buyer’s access to trading will be revoked. The same rule applies to brokers.
Additionally, effective July 1, the mandatory gasoline sale volumes on the exchange for refineries have been reduced from 15% to 10% of production volumes. A similar measure is currently under consideration for diesel fuel, reducing the requirement from 16% to 10%. This change has been implemented to encourage more direct transactions, bypassing intermediary exchanges. For instance, this allows direct supply agreements between gas stations and refineries.
This decision has been made against a backdrop of supply issues in various regions and a sharp rise in prices at gas stations. During a government meeting, Deputy Prime Minister Alexander Novak indicated a need to refine the exchange trading system to ensure that fuel is delivered directly to end consumers, eliminating the middlemen who inflate prices.
The brokers authorized to conduct transactions for third parties are limited to participants with member status on the exchange.On the surface, the logic is sound: fewer intermediaries (traders) should equate to lower prices, as each adds their own markup to the cost of each liter. The issue arises from the plummeting role of the exchange in our fuel market this year. In July, the volume of gasoline and diesel sold on the exchange fell to less than half of that during the same period last year. However, fuel consumption in Russia has not declined. This indicates that trading has shifted to alternative channels, largely unrestricted by the government. Sales can happen directly between gas stations and refineries or through traders.
As Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and a member of the Expert Council for the "Gas Stations of Russia" competition noted in an interview with "RG," the primary pricing indicator for our fuel market now stems from small wholesale transactions (off-exchange), which have become the main driver of price increases. This results in a situation where prices on the exchange are relatively low, and at gas stations belonging to major oil companies, they are also low, yet, in the small wholesale sector, prices can reach up to 200,000 rubles per ton. To resolve this situation, we need clear and understandable operational mechanisms rather than playing the market economy. A system of state regulation for the fuel market using big data and artificial intelligence is more efficient and less susceptible to human factors and informational noise. The exchange, however, is heavily dependent on these elements, the expert emphasizes.
Conversely, traders have not emerged from a vacuum. First and foremost, they benefit from economies of scale. Many independent gas stations (over half of the filling stations in Russia) that are not affiliated with major oil companies simply cannot afford to acquire their own storage for fuel, negotiate contracts with refineries, or manage transportation logistics. For them, these would represent an unreasonable financial burden.
According to energy expert Kirill Rodionov, traders often become scapegoats in the market. Whenever prices rise, they are usually blamed. In reality, traders are a natural part of any market, including the fuel market. They serve as intermediaries with the financial and logistical capabilities to purchase fuel on the exchange and subsequently resell it to gas stations. The efficiency of using traders correlates directly with the volume of gasoline sold on the exchange. Greater sales volumes equate to more fuel being available to independent fuel retailers at acceptable prices. The current challenge lies in the insufficient supply of fuel in the market. By increasing supply on the exchange and attracting more traders, these traders can help balance the market and reduce the significant price discrepancies between various gas stations, according to Rodionov.
A similar view is held by Sergey Tereshkin, CEO of Open Oil Market: the fuel market cannot exist without traders. The role of traders, to some extent, is derived from exchange regulations: the higher the norms, the more substantial role traders can play in stabilizing the market.
However, supply is currently constrained, meaning that any increase in exchange regulations is not on the horizon. Moreover, according to analyst Sergey Kaufman of the Finam Financial Group, the reduction in sales norms for fuel reflects the fact that even vertically integrated oil companies (VIOCs), which manage the entire production cycle—from oil extraction and processing to fuel sales at their own gas stations—are struggling to meet their standard obligations due to insufficient gasoline. In these conditions, VIOCs find themselves sending less fuel to the exchange in order to supply their gas stations adequately.
According to Kaufman, the retail fuel prices for gasoline and diesel will not be affected by the regulatory constraints and new trading rules on the exchange. These measures do not increase the overall fuel supply in Russia; they only marginally adjust logistics. In some cases, this may expedite the delivery of fuel to end consumers. However, the fundamental issue at the St. Petersburg exchange remains the physical shortage of fuel. Trading volumes have decreased significantly, and prices are artificially capped (a step rule of 0.01% applies—the maximum possible daily increase in quotes), often making it physically impossible to purchase the required volume of fuel. If crude oil processing is restored, the fuel market could quickly return to normal, and retail fuel prices could decrease relative to the current abnormal values, the expert believes.
The state regulation system for the fuel market utilizing big data and artificial intelligence is more effective.The current situation poses significant risks for independent gas stations, as noted by Tereshkin. Exchange trading is expected to recover rapidly after restrictions are lifted. The critical question is how the pool of end purchasers for fuel from the exchange will change, considering that the current crisis will not be survived by all independent gas stations lacking direct access to fuel supplies.
Rodionov believes that traders are also under threat, with some companies potentially disappearing from the market. However, the market and exchange trading are expected to rebound quickly, as soon as restrictions are removed.
However, the date for lifting these restrictions remains unknown. The restrictions on gasoline purchases by end users have been imposed indefinitely. Conversely, the sales norms for gasoline on the exchange have been reduced until September 30, although this measure may be extended if necessary.
Source: RG.RU
