Deputy Prime Minister Alexander Novak informed on April 23 that an agreement with oil companies on the supply of fuel to the Russian domestic market needs to be completed in the near future.
“Currently, we are preparing agreements (on fuel supply to the Russian domestic market) with businesses. We are making some decisions to stabilize wholesale prices on the exchange,” Mr. Novak said.
The Russian Deputy Prime Minister added: "And in the near future, we need to complete an agreement with the Ministry of Energy, the Federal Antitrust Agency and our vertical integrated companies. This is a task that needs to be completed in the next few days.
Interfax sources said that the agreement is expected to stipulate that the Russian Ministry of Energy will recommend businesses on planned production output, supply volume to the domestic market, sales volume through the exchange, as well as export volume of standard 5 gasoline and diesel oil.
In return, businesses are committed to implementing these recommendations, taking into account production capacity, logistics capabilities and corresponding needs in the domestic market. Businesses will have to prioritize fuel supply to the domestic market through all distribution channels.
Oil producers will have to ensure that retail prices of gasoline and diesel fluctuate in line with inflation according to data from the Russian Federal Statistical Service (Rosstat) this year, while taking into account changes in the fiscal burden related to value-added tax and special consumption tax. A separate clause also stipulates conditions to ensure that the sale of petroleum products in the Far East region is not loss-making.
According to the agreement, oil companies have the right to exchange with the Russian Ministry of Energy on adjusting recommendations related to planned fuel production and volume in case of force majeure events.
The Russian Ministry of Energy and the Russian Federal Antitrust Agency will supervise the implementation of the recommendations. The agreement after signing will be effective until the end of 2026.
Previously, the Russian Ministry of Energy sent monthly recommendations to oil companies on fuel supply to the domestic market. Businesses consider these recommendations when implementing business plans. According to the new proposal, the recommendations of the Ministry of Energy are more binding, according to sources noting.
Since the end of February, fuel prices on the Russian exchange have increased due to the worsening situation in the Middle East. In the context of rising prices, the SPIMEX exchange has applied strict limits to fuel price increases in trading (0.01%). At the same time, seasonal demand for oil products in Russia usually begins to increase from April. Russian oil refineries have been attacked by drones and are under repair, while periodic maintenance also begins in the spring.
To support the domestic oil product market, the Russian government has applied a complete ban on gasoline exports from the beginning of April to the end of July, expanding the application to production companies as well. Only supply sources under intergovernmental agreements are exempt from this restriction.
