The ban applies to fuel, including that purchased at exchange auctions. Exceptions include batches placed under customs procedures before the decree on the temporary restriction came into effect, supplies under intergovernmental agreements, and fuel in technical tanks used by aircraft en route.
The decision was made amid a sharp rise in aviation fuel prices. At its peak on May 25, quotes on the St. Petersburg International Mercantile Exchange reached a historic high of 96,960 rubles per tonne. Since the beginning of April, prices have increased by nearly 25%. At the same time, there have been no reports of a shortage of aviation kerosene.
As noted by Sergey Tereshkin, CEO of Open Oil Market, in an interview with RG, aviation kerosene prices on the Russian market are not heavily dependent on oil prices. As with gasoline and diesel, the final price for consumers is composed of the costs of oil extraction and refining, transportation costs for petroleum products, and the margin of the sales segment, including the profit of companies selling aviation kerosene to air carriers.
At the same time, the sharp rise in global barrel quotes due to the conflict in the Middle East undoubtedly pushed prices up on the Russian market. Additionally, reports of unscheduled maintenance shutdowns at several domestic refineries may have served as a trigger.
Aviation fuel is produced in Russia in sufficient quantities to meet domestic demand and exports. Approximately 11 million tonnes of aviation kerosene are produced annually in the country, of which 15-20% was exported, primarily to Central Asian countries.
Tereshkin believes that the export ban on aviation kerosene is intended to deter oil companies from further price increases. Some stabilization may occur now, but a "reversal" to normal levels will take place only after transit through the Strait of Hormuz resumes. The current information environment provides oil companies with opportunities to maintain aviation fuel prices at elevated levels.
It is worth noting separately that a damping mechanism is in place for aviation kerosene in Russia. This is similar to the damping mechanism for motor fuel, but with one key difference. It is paid not to fuel producers, but to carriers — airlines. The government reimburses 65% of the difference between the export price of aviation kerosene and the fixed (government-set) domestic market price.
The government decree contains no instructions regarding damping payments. That is, airlines will continue to receive them, and this should help curb the rise in airfare prices, where fuel costs account for 25-35%.
Source: RG.RU
