With Russia suspending gasoline exports to stem shortages and price surges in some regional Russian markets RT Business spoke with Aleksandr Nazarov from Gazprom Bank about the causes and whether the move will have the desired effect.
RT: What lies behind this – why is one of the world's biggest oil producers struggling to supply petrol to its own people?AN:“Basically what is happening now is that the situation is hard with diesel and high octane automobile petrol in some regions of Russia.I wouldn’t say that thw whole of Russia is completely run out of high octane petrol and diesel, but in some regions the situations, I would say, is really bad.The problem is actually that the government has applied the new tax regime for export of oil products, so probably now for some oil companies it is more profitable to export this petrol and diesel outside Russia rather than sell it at domestic retail stations. Also in the first quarter this year export duties for crude oil was provided very attractive netbacks for the crude exports, so basically oil companies also preferred to export crude rather than refine it in Russia.So together with some minor regional logistics problems it turned into some regional deficit of fuel in some Russian regions.”RT: Do you think the export ban will help curb the growth of fuel prices in Russia, or at least cover shortages?AN:“Well I wouldn’t say that actually government would prohibit export of oil products, moreover I wouldn’t say that large oil companies prefer to export these high octane fuels, because actually they prefer, it is more profitable to sell it through own domestic retail, branded ones.The result of that, if the government will prohibit or ban export of oil products from Russia I would say it will affect for pretty short time – it wouldn’t actually have a long term effect.The long term effect will be the complete unregulation of domestic Russian fuel market., but this is also a problembecause currently high oil prices, together with high oil taxes, leads to very high prices for fuel at retail chains, and now probably, it’s the agriculture season has started.So Russian government cannot allow it as well so it is catch 22 here.”RT: How long do you expect the ban to last and how significant is the Russian export ban for overseas markets?AN:“First of all I don’t think that the ban will really matter, as I told you before, but I think if the situation will not change probably the ban will be there until the oil price started to decrease, but I don’t think it will be the case for the next year or two.”