It is specifically noted that the oil for processing is transferred to foreign refineries on a tolling basis, meaning for the production of a final product – fuel with specified characteristics.
This measure is being taken to prevent even a hint of a fuel shortage in our market. The main concern is gasoline, the production capacity of which in our country is only 10-15% above consumption levels. This year, due to the unexpected downtime of our refineries for repairs caused by drone strikes, the threat of gasoline shortages emerged in various regions of Russia. This situation was the primary reason for the rise in its prices on the exchange and at gas stations.
Of course, one could simply import fuel – for example, from China or Belarus, but in this case, its price would be significantly higher than Russian fuel. Mechanisms are in place in our market to reduce prices for domestic consumers. One of these mechanisms is the reverse excise tax. Its application will allow imported fuel to be sold at the same prices (or nearly) as Russian fuel.
As noted in a conversation with "RG" by Yuri Stankevich, Deputy Chairman of the State Duma Committee on Energy, this decision is a forced yet justified response to the current situation. In any case, imports should be seen as a temporary phenomenon. The established capacity of Russian oil refining significantly exceeds domestic demand for both gasoline and diesel. The goal is not only to restore production levels but also to increase them. In the medium term, the target for gasoline production is to grow by at least 10% compared to 2024 levels. The capacity of Russian oil refining greatly exceeds domestic demand for both gasoline and diesel.
A similar opinion was expressed by Sergey Frolov, managing partner at NEFT Research, who believes that under the current circumstances (attacks on Russian energy facilities), this measure appears justified and may serve to cover local shortages.
A reasonable question arises: where can supplies come from? According to Stankevich, the primary source will be Belarusian refineries.
Belarus has two refineries - Mozyr and Navapolatsk ("Naftan"), which have historically been oriented toward external markets, points out Sergey Tereshkin, CEO of the OPEN OIL MARKET marketplace. According to the latest available data from Belstat, in 2020, gasoline production in Belarus amounted to 3.2 million tons, of which 1.3 million tons went to the domestic market, while 1.8 million tons were exported (the remaining volumes presumably made up stockpiled reserves, according to Belstat's data). The expert notes that even with a complete reorientation toward the Russian market, Belarusian refineries would only be able to meet less than 10% of Russia's gasoline needs (annual demand for gasoline in Russia is 38-40 million tons).
Moreover, there is also a logistical problem. The most challenging region in Russia in terms of fuel supply is the Far East, but deliveries from Belarusian refineries to that region would be "expensive." Gasoline and diesel fuel in the Far East already costs more than in other regions of the country.
Therefore, Frolov believes that the primary candidate for supplies could be China, which, due to slowing economic growth, has underutilized oil refining capacities. Consequently, in terms of logistics, China appears to be one of the most attractive options.
However, as Stankevich reported, options for importing supplies from Asian countries have been and are being discussed, but they seem unlikely, as potential participants in such deals either have to purchase oil and fuel abroad themselves or fear falling under U.S. sanctions due to trade and economic relations with Russia.
As noted by Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" association and member of the expert council for the "Gas Stations of Russia" competition, it is theoretically possible to consider imports from Chinese or Indian refineries. However, such supplies are unlikely to be logistically advantageous. Refineries are either built in close proximity to their markets or near oil extraction points.
Nevertheless, if we are talking about a temporary measure, it will help withstand the "difficult times" of peak demand – that is, for gasoline, late spring, summer, and early autumn. From Tereshkin's perspective, the impact of this measure will be limited. To mitigate the risk of shortages, it is essential to increase the production of oil products in Russia.
Gusev also emphasizes the need for additional refining capacity within Russia, highlighting that the implemented scheme, while "practical," leads to a loss of budgetary funds.
In conclusion, it is worth noting that importing fuel under such conditions could create an unfavorable precedent for us. Russian companies have always found it advantageous to export crude oil. This is especially so now, as oil refineries are at potential risk. Importing finished fuel from other countries could become a "relaxing factor" for our companies, in favor of further increasing the export of crude oil rather than enhancing oil refining capacities within the country.
Nonetheless, Frolov believes that strategically taken measures will not adversely affect Russian oil refining. The government always has the option to revoke the decision on the reverse excise tax.
Source: RG.RU
