Rosneft chief Igor Sechin sent a letter to Vladimir Putin in late May proposing steps to stabilize Russia’s fuel market amid what Kommersant described as an unprecedented number of refinery damage incidents.
In the letter, Sechin said that producers of Euro-5 gasoline and diesel are currently subject to mandatory exchange-sale quotas of 15% and 16% respectively. He proposed suspending those requirements until refinery capacity is fully restored.
Measures proposed
- require producers of Euro-3 fuel with temporarily lowered quality characteristics to sell all of their output on the exchange;
- give end buyers of gasoline and diesel priority access to exchange purchases rather than resellers;
- require all oil companies to send at least 30% of extracted crude for domestic refining;
- change the method for calculating exchange-sale volumes for vertically integrated oil companies, taking into account the needs of their filling-station networks, state orders, and essential-service enterprises.
According to Kommersant, the president reviewed the letter and instructed Deputy Prime Minister Alexander Novak to consider it and report back.
Industry sources cited by the newspaper singled out the proposal on priority fuel access for end buyers. They called it a logical initiative but said implementation could be difficult because many independent filling-station chains buy fuel through traders rather than directly, making end-buyer status hard to define.
Against the backdrop of strikes on Russia’s oil industry facilities, previously reported by Reuters, almost all major refineries in central Russia had by late May been forced either to cut output or suspend production. After that, dozens of regions introduced limits on gasoline and diesel sales, and the authorities allowed some refineries to supply the domestic market with fuel deviating from the Euro-5 standard. In the second half of May, it was also reported that independent filling stations, which account for about 40% of fuel sales in Russia, were unable to replenish stocks on the exchange.