Moscow, 3 April - Neftegaz.RU. Consumption of gasoline in Russia is stagnating due to an economic slowdown and lower incomes, according to the report of Platts from the Creon Energy's conference on the prospects for motor fuel.
Domestic sales were 35.2 million mt in 2017, unchanged on the year, according to data provided at the conference. Meanwhile production in 2017 was slightly down on the year at 39.2 million mt mostly due to refinery maintenance, senior analyst at Creon Energy, Maria Dubinina, said.
But output is expected to grow in 2018, head of the Commodities Market Analytics (ATR) agency Mikhail Turukalov said on the sidelines of the conference. With domestic consumption expected to remain flat, the extra volumes are likely to head to exports.
At least 3 Russian refineries - Kirishi, Antipinsky and Taneco - are due to launch gasoline units this year, which would result in higher gasoline production.
«The market is 'catastrophically' unfavorable for gasoline producers since about mid-2016, due to artificial price regulation,» Turukalov said on the sidelines of the conference. Delegates also called for the government to reassess the impact of taxation on the export netbacks, which had exacerbated the situation.
Domestic refining fell in 2015 and 2016 due to the lower crude price, but rose in 2017, according to Creon Energy data. Typically lower crude prices lead to a lower subsidy for Russian refineries which benefit from the spread between crude and product export duties which narrows at a lower crude price.
However, in 2017, processing has increased at many refineries, apart from those affected by maintenance. Mini refineries increased their processing by 15%.