Belarus will leave Russia without diesel fuel

Belarus may completely stop supplying motor fuel to the Russian market due to the halving of damping payments from September, Kommersant writes, citing sources in the fuel market.

According to them, Belarusian refineries have been supplying fuel to the SPIMEX exchange through the state-owned Russian trader Promsyriyeimport since the end of last year. They sell gasoline and diesel fuel to him, and then the trader sells them through the exchange at domestic prices.

At the same time, Promsyryeimport compensates for the gap between the purchase price and the domestic price through damping payments from the budget. In particular, in 2022, the company received more than RUB 1 bln in dampfer payments, although it started deliveries only in October.

Such a scheme for supplies of diesel fuel from Belarus was invented specifically to replace its shortage in Russia. Prior to that, only Russian refineries received payments for the damper from the Russian budget. But in September 2022, the government ordered to grant Promsyryeimport the right to sell gasoline and diesel fuel, produced by a “foreign organization”, and claim for the damper.

According to the amendments to the Tax Code, the dampfer payments will be halved in September. As a result, the purchase price of Promsyryeimport will also decrease, making it unattractive for Belarusian producers. In this case, refineries in Belarus will reorient their exports to far abroad via Russian ports of the North-West, the sources say.

According to market participants, in recent weeks, Belarusian suppliers accounted for 4% and 14% of all sales of gasoline and diesel fuel, respectively. The cessation of fuel supplies from Belarus may create additional tension in the market, especially in the segment of diesel fuel, where the absolute price record was updated on August 7 – a ton of fuel went up to Br60.4 thousand. The rise in prices is due to the increase in demand and expectation of the withdrawal of Belarusian goods, the sources said.

At the same time, the established scheme of subsidized fuel supplies from Belarus supported the refineries of the republic, which stopped supplies to Europe due to sanctions. In particular, the damper payments helped the Belarusian budget, a significant share of revenues, which depended on income from sales of petroleum products. After the outbreak of the war in Ukraine, exports of oil products from the country suffered greatly, as Minsk provided Kyiv with 45% of imported gasoline and 37% of imported diesel fuel.

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