The introduction of export duties of $250 per ton would be equivalent to an export ban (as of October 1, the duty on light petroleum products is $7.1 per ton), but if this option is adopted, It is anticipated that the customs payment will be refunded. to exporters if they supply the domestic market with a certain volume of petroleum products, which will be determined by the government.
The parameters of mandatory supply to the domestic market are still unknown, but we can already conclude that this option will be more profitable for oil workers, mainly for large companies that can freeze large funds for a time, and for gasoline producers, since A relatively small part of its release, most of it is absorbed by the domestic market.
According to the director of the National Energy Security Fund, Konstantin Simonov, of course, the smartest and most attractive idea is to use financial incentive instruments, that is, increasing export duties with the possibility of reimbursement for those who supply oil products to the Russian market in the required volume. But there are doubts about the effectiveness of this measure. The price increase is associated with a halving of compensation payments to oil workers from September 1 (compensation from the budget for the supply of fuel to the domestic market at a price lower than the export price) . The problem is this. And we have an obsession with volumes, which is a bit grotesque. We want to stimulate the supply of fuel to the domestic market and it is believed that then, due to competition, the equilibrium price will decrease. But in Russia the fuel market in its classical form is not entirely competitive. And it’s not about volume, but about shock absorption: it seems to me that it would be worth returning to this topic, says the expert.
That is, if protective duties are introduced, even if they are refundable, the tax burden on the oil refining industry will not decrease, but will even increase at this time. Taking into account the fall in the ruble exchange rate (and taxes and duties, even temporary ones, are paid in rubles) and the increase in barrel prices and export prices for oil products, oil prices Fuels can only be stabilized by excess stocks on the market, so that supply far exceeds demand. Such a model is hardly economically efficient. But there is also a temporary export ban.
As Kirill Rodionov, an expert at the Institute for the Development of Technologies in the Fuel and Energy Complex, points out, exports have never been of great importance for gasoline producers. In the period from 2016 to 2021, the share of its exports in the productive structure never exceeded 14% at the end of the year. But the export of diesel fuel (DF) made it possible to reduce the surplus national capacity. Between 2016 and 2021, its share of exports in the productive structure ranged between 50% and 57%. At the same time, it is important not to forget that in recent months Russia has been reducing the export of petroleum products following a reduction in oil production and exports: according to S&P Global Platts, our maritime exports of petroleum products in the period Between March and August 2023, it decreased by 780 thousand barrels per day, to 2.27 million barrels.
Of course, after the embargo by the EU and the G7 countries on the import of our oil in December 2022 and petroleum products in February 2023, the structure of exports changed, but not enough to create a deficit in our market. In the spring of this year (also a time of heavy agricultural work), when our exports were breaking records, fuel prices in wholesale trade were very far from the current record levels, and in retail trade until May they were even lower than last year.
In Simonov’s view, a complete, albeit temporary, ban on exports may have some effect in the short term, but the consequences will be extremely dramatic. In the future we will see market shortages, declining fuel quality and falling budget revenues. Furthermore, we will only lose new emerging markets. In fact, this is what we have been fighting for for a whole year, redirecting export flows of oil products, finding new logistics, new customers.
The Russian fuel market is characterized by two key problems: an increase in wholesale prices, which translates into the cost of retail fuel, and a fuel shortage in the regions, which especially affects agricultural producers, explains Rodionov. . These problems cannot be solved by export restrictions.
In his opinion, an increase in export duties or a complete ban on the export of oil products will not create incentives for greater competition on the exchange and will not solve infrastructure restrictions on the Russian railway network. The solution is to reduce excise taxes on fuel, increase exchange sales standards and remove infrastructure restrictions, including by developing the Russian railway network and deregulating the locomotive traction segment. Export bans can only “scare” oil workers, but it is impossible to solve the problem in the long term.
