According to Rosstat, inflation in our country last year made 8,39%, having more than twice exceeded a target indicator (4%). Consumer prices of gasoline increased by 8,84%. It though is insignificant but above the actual rate of inflation. Last year was extremely difficult for the market of motor fuels both in Russia and abroad.

According to all available data from Rosstat dated the end of 2020, total of gas stations in Russia made 30,2 thousand. If to subtract from this quantity gas and electric, we will receive about 25,9 thousand gas stations at which it is possible to fuel gasoline and diesel.

A well-known fact is that almost every year a number of Russian gas stations are preparing to be reduced in torment. Independent players threaten the last 15 years with fast death of the business, and with it — final and irrevocable death of the competition in domestic market of our country. During so long extinction a share of the independent increased approximately from 50% to 65%. And a number of gas stations since pre-crisis 2013 grew approximately by 1174 units.

Thus it is impossible to deny decrease in marginality of which many players complain. By independent estimates, from the middle of the 2010s the margin on AI-92 was reduced more than half.
Objectively there is a business integration process as well. Small networks (and single gas stations) give a way to more largely networks. But this is not about prompt absorption of small independent players by vertically integrated oil companies. Large networks simply appear more effective in an independent segment as well.

Obligatory control of prices

To some extent, special attention to fuel business from wide audience is quite justified. Motor fuel is one of important components of cost price of the vast majority of products. And as the wide audience will not understand refueling business for the obvious reasons, any changes in this sphere look disturbing for it.

The strain in submission of information on refueling business existed at least for the last 30 years. But this strain became superfluous not so long ago, in 2018, against the background of two price crises. It was then that complaints began to pour in from independent players that oil companies were selling fuel to them more expensive than to their networks in order to squeeze competitors out of the market. Considering growth of a share of «competitors», it is impossible to call squeezing any effective. But if to speak seriously, small independent players can be easily understood: any shocks in the market appear more painful for them than for large players. However lower prices of gas station, belonging vertically integrated oil companies, were caused not by a desire to squeeze out other players but obligations to the state.

Actually oil companies went for decrease of profit of the refueling business for performance of social functions. And independent players had to adjust own prices accordingly. In those regions where networks of large energy companies are not presented, independent players safely use price tags 3-4 rubles higher than average in Russia.

This state of affairs received continuation in 2021 when representatives of one rather big network from one hundred gas stations complained of wholesale prices and low sales. Thus fuel at their gas stations was couple rubles more expensive than at gas station of the large energy companies located in the same area. It is interesting why consumers did not hurry to refuel at higher prices? But for detailed conversation on high prices we should return to the beginning of 2021.

«Petrol prices will sharply grow»

The forecast about possible sharp increase in prices for motor fuel in 2021 started sounding in December 2020. As the background were considered the growth of mining tax and increase in excises planned by the state. Some risk seemed also in an increase in prices for oil at weak ruble.

Certainly, there is an opinion supported with the corresponding researches that mining tax does not influence cost of production of gasoline and the diesel at all. Behind this opinion the following logic is covered: mining tax is paid by oil companies, but oil refineries (oil refinery) represent a separate type of business that is cost of the oil bought by them does not depend on the sum of the taxes paid from it. Wise researchers consider reasonable to give as examples of oil refinery from the United States and Germany. For some inexplicable reason in this case a simple fact is ignored: Russia (unlike the USA and Germany) is the power surplus country. All oil recycled in our country is extracted in our territory, and the majority of three tens large Russian oil refineries belong to vertically integrated companies.

But let’s assume that mining tax really does not matter. Even in this case, we cannot help but notice that after the start of implementation of the final stage of the big tax maneuver, the Russian market of petroleum products is becoming more and more dependent on foreign quotations. Export duties could be considered as the buffer which automatically reduced influence, for example, of the European prices on motor fuel in Russia. But we after all build economy of open type, in parallel reducing export duty which by 2024 has to reach 0%. Along with it the mining tax rate grows.

Can the domestic market ignore the export alternative in such conditions of an open economy? No, it cannot of course. And all participants of the market and the appropriate government bodies perfectly understood it. Therefore a decision to introduce two mechanisms which had to maintain profitability of oil processing in the changed tax conditions (transfer of the main tax burden on activity in Russia) and to reduce influence of the foreign markets on the Russian exchange platforms was made. So the system of the return excise on oil with the damping extra charge started to be used.

This system worked moderately effectively but 2021 showed a need of additional tax adjustment.


The tax component, specific to motor fuel, annually changes. In it, it is possible to identify the forecasted segment, which includes excise taxes directed to the formation of road funds.

At the beginning of 2021 they grew by 4% to 13 262 rubles per ton for Euro-5 gasoline (and to 13 624 rubles per ton for gasoline of lower ecological classes) and to 9188 per ton of diesel fuel. In 2022 this indicator reached respectively 13 793 rubles (14 169 rubles) and 9556 rubles per ton. In other words, in each liter of Euro-5 gasoline it is sewn up «excise» 10,34 rubles. And in 2024 in the same liter 11,19 rubles will be included.

It is impossible to call an excise the ideal tax tool. It a priori annually increases prime cost of motor fuel. But it is predicted.

And here operation of the damping mechanism was not so predicted: in 2020 gasoline rose in price only for 2.5%. It did not prevent to index indication price in the damping mechanism of a rate of inflation (about 5%) then it made 56,3 thousand rubles per ton. Thus, not only tax pressure due to growth of an excise increased, but also protection of domestic market against influence of external platforms decreased (after all the conditional price stitched in a damper was much higher than the real market indicators).

In the first quarter of 2021 it became obvious that the similar approach which is torn off from market realities does not work — the prices grow. It was decided to adjust the base price by 52.3 thousand rubles per ton from May 1. It is remarkable that for 2022 this indicator was established at the level below what was originally offered to be used in the 2021 — 55,2 thousand rubles. For diesel fuel value of the base price last year remained at the level of 50,7 thousand rubles per ton (in 2022 — 52,25 thousand rubles).

But wait, why lower some indicator in some mechanism, if the reason for the increase in motor fuel prices is obvious to everyone: the greed of oil companies that took all gasoline abroad, exposing the unfortunate domestic market! Some prominent experts at the same time even aggravate the guilt of Russian producers, stating that at such a crucial hour they artificially underutilize their refineries, because — attention! They can process 300 million tons, and only 250 million tons are processed!

Let’s leave behind the brackets different depth of processing at the Russian plants and a question of efficiency of loading of installations. But we will pay attention to increase in production. For example, Gazprom Net increased production of gasoline by 5,3% (to 7,26 million tons — about 20% of the Russian demand) and diesel fuel — for 7,9% (to 9,69 million tons — about 25% of the Russian demand). For comparison: for the first 11 months on domestic market 33,3 million tons of gasoline (4,7% more than for the similar period of 2019) and diesel fuel — 35,9 million tons (growth by 4%) were shipped.

The country leaders have two effective tools which allow to sate domestic market in due volume. The first of them is a close interaction between oil industry workers and the Ministry of Energy. The schedules of repairs of oil refinery are agreed with the ministry, vertically integrated companies accumulate the demanded volumes of stocks and increase production if necessary. The second tool is an adjustable share of produced fuel which oil industry workers are obliged to sell through the exchange. It is enough these tools for thin regulation of deliveries to domestic market. Therefore protecting export duties which were actively discussed at the end of summer last year were not entered. There was no sense in it as the problem was not with saturation of the market.

The problem, if I may say so, was in the growing influence of external trading floors on in-Russian. And the prices on these platforms grew in process of oil rise in price that at weak Russian currency led to astronomical take-off of the external prices in a ruble equivalent.

If the damping mechanism did not exist, petrol prices in Russia could increase by the beginning of the current year to 75 rubles per liter. We believe, all motorists noticed that the prices in our country were lower.

Whether the damper ideally works? No. It should be tuned up. For this purpose between participants of the market and the government dialogue is carried on. And the reason for dialogue is given also by the current year — oil rises in price, having come nearer to a mark of 100 dollars per barrel and the ruble remains weak.

At the time of writing of this article the law according to which a share of the compensated difference between indication price and export alternative increases was considered: on gasoline from 68% to 83%, and on diesel fuel — from 65% to 83%. But thus the level of admissible excess of wholesale price of diesel fuel over the indicative — from 20% to 15% is reduced. At excess the extra charge is nullified. It is supposed that after approval the law will come into force since April 1.

The dialogue is carried on not only concerning taxes and deductions but also concerning additional tuning of rules of exchange trade. Work in this direction was conducted after crisis of 2018, and in August of last year the Deputy Prime Minister of the Russian Federation Alexander Novak assumed that the authorities can correct exchange trade of motor fuel. Possibility of introduction of a temporary ban on sale of gasoline and the diesel for all, except producers was assumed. Similar initiatives are reflection of the simple fact: in the market of motor fuels are present not only producers and not only they can have impact on this market.

It is interesting that sometimes dialogue is also necessary with consumers who see a certain financial help which the state gives to the oil and gas companies in a negative excise and the damping mechanism, though this «financial aid» is, in fact, a tax deduction. For example, as what is received after purchase of an apartment. And it is not the only thing that is worth explaining to the consumers.

Foreign context

In the summer of 2020 a part of Russian audience of mass media was struck with the news that gasoline costs cheaper in the USA than in Russia. Some of the excited public even began to demand that we do the same: that motor fuel fluctuate more actively after oil quotes. Few people were interested in the fact that after a record drop in gasoline prices in the United States began to rise to the indicators that caused alarm at the level of the president of the country. The US decision to use a part of the strategic reserve of black gold in a vain attempt to bring down world prices was largely an answer to uncomfortable questions from its own population: do respected leaders plan to do something with the rising price of gasoline? But the movements of the States did not have any significant impact on the market.

Actually, reduction of prices of motor fuel which so admired a part of citizens of Russia in the USA happened for two obvious reasons: falling of prices of oil and collapse of demand. According to Energy Information Administration of the Ministry of Energy of the United States (EIA), average annual consumption of automobile gasoline in this country in 2020 fell to 1,2 million barrels per day. In 2021 this indicator grew by 0,7 million barrels per day. EIA expects additional increase by 0,3 million barrels per day in 2022 and on 0,1 million barrels — in 2023.

In this context it is remarkable that the short-term power forecast of EIA assumes as if retail prices for gasoline in the current year will average 80,7 cents per 1 liter (3,06 dollars per American gallon), and in 2023 will decrease to 73,9 cents for 1 liter (2,8 dollars per gallon). For comparison, average value last year made 79 cents per 1 liter (3 dollars for gallon) but in the fourth quarter came nearer to a mark of 1 dollar per 1 liter.

Optimism in the American analysts was installed by reduction of prices in December 2021. But it caused by falling of prices of oil against the news about an omicron strain. For the beginning of February of this year gasoline to the USA returned to the mark of 98,4 cents per 1 liter that is already beaten out for a framework of optimistic schedules of EIA. And in the middle of the month it started setting cost records at all, having stepped over a mark of 1 dollar for liter.

Gasoline and diesel fuel traditionally are very expensive in comparison with the majority of other states in Europe. It is enough to tell that eight of the first ten positions on high cost of gasoline are occupied by the Old World. Besides by the present moment at the first ten the price of liter passed a mark of 2 dollars. For comparison: in Russia this indicator is 0,68 dollars per liter.

It is noteworthy that European gasoline is so expensive that even natural gas, which has risen in price on the stock exchanges, has remained a very attractive type of motor fuel. The Czech Gas Union reports that in 2021, demand for compressed natural gas in this country broke a record and amounted to 97,112 million cubic meters. At a gasoline price of $ 1,7 per liter (in the Czech Republic), gas at $ 1-1,2 per 1 cubic meter is more than profitable.

On one wave with an energy crisis

The reasons of a rise in price of motor fuel in the countries of the West are obvious: increase in prices for oil, increase in demand and specifics of a local tax policy. So, last year in summer consumers in the USA started traveling more, having come nearer to pre-crisis indicators. And the branch was not ready to such growth. Though the States accused of the troubles the countries of OPEK+ which do not wish to solve a problem of Americans according to the first requirement.

Not least because of efforts of OPEK+ black gold last year appeared a stability island in comparison with gas and coal, and also semiconductors and metals among which the lithium which rose in price in a year for 560% became the champion on an increase in prices.

On this restless background the automobile industry appeared in crisis again. According to the MarkLines Company, the volume of realization of new cars in 2021 grew concerning the indicators of 2020 by 4% — to 80 million units. Such an indicator cannot be considered as a reason for optimism. Even in pre-crisis 2019 sale of new cars dropped but then it was realized about 91 million units. And this indicator was the farthest from the record 96 million sold in 2017.

Sales of new cars suffered because of the deficiency of accessories shown in the third quarter.

But sales of electric cars in 2021, according to the International Power Agency, grew to 6,6 million units. Thereof 3,4 million were sold in China, 2,3 million — in Europe and 0,7 million — in the USA. The electric segment showed the most dynamic growth in relative sizes. And in absolute sales increased by 3,5 million units.

That is, while we are talking about the difficult fate of gasoline in Russia, the world is applauding the electric mobility of transport and is about to abandon internal combustion engines. However, applauders diligently forget that about 45% of electric vehicles sold are chargeable hybrids. So, sales of electric cars in the EU grew from 538,7 thousand in 2020 to 878,4 thousand in 2021 and the loaded hybrids — from 507,9 thousand to 867 thousand. But all were overtaken by usual hybrids which realization jumped up from 1184,5 thousand to 1901,2 thousand.

Electric mobility is fine, but consumers are in no hurry to give up an opportunity to refuel with gasoline. Therefore there is nothing surprising that in January, 2022 the British motorists were compelled to fill the hybrids with gasoline (about 2 dollars for liter) because of an increase in prices at charging stations.

This situation once again emphasizes interrelation of branches. It is impossible to speak about the situation in the world market of motor fuels and not to designate change in structure of sales. It is impossible to estimate prospects of motor fuels without noticing changes in the markets of metals which are applied in batteries. After all it is about the processes affecting thousands of industrial enterprises and potential investments into hundreds of billions dollars.

Thus, according to the investment company Wedbush Securities, quoted by The New York Times, in the next five years, the global automotive industry plans to invest 0.5 trillion dollars in the transition to electric vehicles. At the same time, according to GlobalData, the largest electric vehicle markets are simultaneously the most vulnerable in terms of mineral supply chains.

Fluctuations of grain quotations

The essence of this text is not to show how bad everything is there, but everything is great here. Such a statement of the question does not make sense, since most consumers live here and now. They are interested in the situation in neighboring countries most often only in case when it is possible to use it as an example of low prices as opposed to high prices in Russia. Most often, the general audience is not interested in the reasons why prices are rising, even if the audience itself is trying to convince you otherwise. Often the citizens of our country react to increase in gas station prices much more sharply than to the increase in food prices. For example, bread. The most interesting that concerning bread it is possible using narrow-minded logic in the same way: if we grow up so much wheat, what even we export it why bread in Russia is not on sale on 2-3 rubles.

Strangely, everyone guesses that not only the cost of wheat is included into the price of bread but also a long production chain, including the labor of many people, a number of stages of processing, payment of electricity, water, motor fuel and taxes. And here gasoline and diesel fuel are doomed to be an object of jokes about the rising in price and becoming cheaper oil from year to year. Grain remarkably, rises in price and becomes cheaper too. And here bread price does not hurry to fluctuate together with grain quotations.

But at the same time it is easy to understand in principle the reason for which any news about increase in prices for motor fuel so irritates the population of the country. Welfare does not grow, in any case, if to compare it to pre-crisis indicators (since 2014). And according to Rosstat, growth of the real located income in 2021 made 3,1%.

Motorists will complain of increase in prices even in case their personal income grows the advancing rates. It is more important to keep readiness of consumers and the more so to increase level of demand by motor fuel at change of its cost.

Therefore it does not make sense to convince someone that the Russian prices of motor fuel are at the acceptable level. An attempt to convince is doomed to a failure. And it will not affect the real level of demand in any way. Quite objective factors have impact on it: family income, stability on a workplace and social security.

In this regard ratings which make GlobalPetrolPrices and «RIA Rating» are very indicative. According to these ratings, by absolute indicators Russia is on the second place in Europe and on the 23rd place in the world on low cost of gasoline. And on availability level (proceeding from average salaries) we take the 17th place (in 2020 there was the 20th) among 32 countries of Europe. This is the middle. This position can be improved in three ways: reduction of prices, growth of the income of the population or due to prompt deterioration of the situation in other countries where own tax systems and the strategy of development of the energy sector reign.

The attention to the events in other countries is important for an assessment of natural experiment which reveals defects of other models of pricing, and also shows reaction of the population. And for wide audience the description of that occurs in the markets of neighboring states, is an additional reminder what it is not enough to choose, what changes you support, it is important to understand, to what consequences they can lead as in an example with the prices in the USA in the summer of 2020 and the same prices now.

Fuel never becomes cheaper

And in order not to end up with an international context, we will return to the Russian market and consider two more important events of the last year in the field of motor fuels. They are connected with winter diesel fuel and propane-butane.

At the end of last year the Head of National Association of the Cargo Motor Transport Gruzavtotrans addressed to the president of Russia Vladimir Putin and declared a rise in price of diesel fuel for 20%. He gave as an example a gas station of one large private oil and gas company where, according to him, diesel rose in price from 46 rubles to 54,12 rubles per liter in a year. A representative of cargo carriers demanded from the country leaders «to interfere with the situation, to make fuel companies moderate the appetites», as well as «to enter regulation of pricing and to look at experience of the western countries».

It is not clear, why the state should moderate appetites of fuel companies in this situation and not, say, the cargo. When certain participants of the market demand from the state to enter regulation, they for some reason automatically strike themselves off the list of those whom it is necessary to drive in the manual mode.

It is necessary to notice that diesel fuel cost cheaper at the companies with the state participation. But the problem, albeit on a smaller scale, really existed, and it was worth paying attention to. At the beginning of January, 2021 an average price of diesel fuel in our country made 48 rubles, and for the same period of 2022 this indicator grew to 53,12 rubles for liter.

The rise began in November last year, when the market needed a winter diesel. This is not the least affected by the next innovations in the field of taxation. Actually, before the problems arose, the expert community spoke about the risks of paying double excise duty (on diesel fuel and kerosene)

But there is one more circumstance which affected average prices.

This indicator takes into account networks that sell fuel for 52 rubles, and networks that sell the same fuel for 58 rubles. And it does not matter that, say, 5 tons of diesel is pumped through the first one per day, and 0.5 tons through the second one. An average price will still be 55 rubles.

During the period of increased demand for winter diesel fuel an enormous price spread was observed at gas stations. On large networks (as a rule, belonging vertically integrated oil companies) diesel could cost 3-8 rubles cheaper than at independent players.

Let the message about a rise in price for 20% was false, but the rise in price for 10% (on the middle of December, 2021 when the address from cargo carriers registered) is really serious problem. But it demands not the appeal to experience of the western countries. It demands further optimization of tax system.

With the end of the cold season and the onset of heat, the demand for winter diesel fuel naturally decreased, along with this, stock quotes also decreased. By the way, it is quite good to cargo carriers to think of transition to available alternatives:-propane-butane and methane. Yes, at the end of summer and in early autumn propane-butane sharply rose in price — to 34-36 rubles per liter. And this event was covered willingly by mass media. And here reduction of prices of this fuel remained unnoticed, though by New Year propane-butane was sold at gas stations on 25-30 rubles for liter. It is surprising indifference. But, as it is known to wide audience, the prices of motor fuel at us in the country never fall.

And while propane-butane, gasoline and diesel were storming in 2021, natural gas demonstrated phenomenal stability on the Russian market, which was kept at a level below 20 rubles per 1 cubic meter. Methane on the Russian market is not afraid of any storms and storms; perhaps it’s worth thinking about transition.