HomeMediaLatest NewsGasoline has risen in price on the stock exchange amid the attack on the Nizhny Novgorod refinery

Gasoline has risen in price on the stock exchange amid the attack on the Nizhny Novgorod refinery

Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department

Sergey Kondratiev, Principal Director on Economic Studies at the Institute for Energy and Finance, commented to the RBC Daily newspaper on the gasoline supply to the domestic market.

The current situation is different in that we are not talking about secondary processes, but about primary oil refining, Sergey Kondratiev commented.

"I think that the strikes on the Nizhny Novgorod refinery can have a noticeable impact on the situation on the Russian gasoline market. The capacity of AVT-6 is 9 million tons of oil refining per year, and the total primary processing capacity of the Nizhny Novgorod refinery is 17 million tons (AVT-5 has a capacity of 8 million tons). This means that now the loading of the refinery will not exceed 45% (against 78-85% in recent months)," the analyst said.

If the loading of the refinery decreases to 40-45% and LUKOIL does not reload secondary processes, then processing at the enterprise will fall by 0.5–0.6 million tons per month (that is 2.5% of the national total), the expert notes. Then, according to the estimates of the IEF, the supply of gasoline will decrease by 90-110 thousand tons, diesel fuel — by 200 thousand tons, he says.

"The supply on the domestic market remains sufficient for now, but if the situation of 2023 repeats this year — with longer delivery times by rail, high domestic demand, and so on — additional measures may be required, for example, accumulation of additional reserves before the peak of demand in the summer, fuel imports from Belarus and others," the expert concludes.

Kondratiev suggests that LUKOIL, in the current situation, could optimize the use of the Nizhny Novgorod refinery's capacities and bring naphtha and vacuum gas oil from other plants to it, for example. This will increase the utilization of secondary capacities, despite the withdrawal of the AVT-6 for repair. However, it is unclear how quickly it will be possible to organize this and whether the company has the necessary storage capacity.
Kondratiev Sergey V. Principal Director on Economic Studies, Head of the Economic Department
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