A manual fuel and energy complex management: why the government lifts the ban on gasoline exports for a month

Marcel Salikhov, President of the Institute for Energy and Finance, and Alexander Titov, Head of the Global Oil Market Sector, commented on lifting the ban on gasoline exports to Novye Izvestia.

It is very difficult for the market to plan its actions, this does not have a very positive effect, but the government is apparently trying to guess and maintain a balance so that refineries do not suffer and prices do not rise, as this is always very sensitive. The effectiveness of such solutions is difficult to assess. If there are fluctuations, then we allow export, then we forbid its, which means it's impossible to predict," Alexander Titov says.

Marcel Salikhov recalls that exporting is still more profitable for companies than selling on the domestic market, even taking into account the damper:

— I think the government wants to see what the reaction will be, both in terms of prices and in terms of accessibility in the domestic market. If everything is more or less normal, there will be a permanent cancellation, although not much gasoline is exported. There is no open data on stocks. Most likely, companies report directly to the Ministry of Energy and the government, so it is difficult to judge how much gasoline overstocking has occurred. But since storage is limited, maybe some volumes were allowed to be exported so as not to destabilize the market.

In fact, the damper is compensation to manufacturers for not driving gasoline and diesel abroad, but selling it on the domestic market for normal money. However, for oil companies, the domestic market, despite surcharges, remains less interesting than exports, Marcel Salikhov says:

— The damper does not fully compensate for the difference between domestic and export supplies, but only by two thirds. Even when the government returned the damper in full, the difference is still not fully compensated, only two thirds of the export netback and supplies to the domestic market.

The damper is not always paid, but only up to a certain price. Despite the fact that the oil industry pays the most taxes — 78% of revenues — this is a highly marginal business, so the energy authorities are trying to get their share for recoverable reserves.