Robert Gilyaziev: ‘I believe that there will be no increase in retail fuel prices for several months’

During the online conference live on Realnoe Vremya, the head of the State Budgetary Institution “Management for Ensuring the Rational Use and Quality of Fuel and Energy Resources of the Republic of Tatarstan”, Robert Gilyaziev, spoke about energy efficiency as a global trend and measures to improve the rational use of fuel and energy resources in the Republic of Tatarstan, the quality of the work of reserve fuel farms of the republic, and also touched upon the topic of quality and pricing of motor fuels at filling stations in Tatarstan.

Mr Gilyaziev, the main activities of your department are carrying out activities to ensure the quality of motor fuels sold and the validity of their prices at filling stations, to ensure the readiness of reserve fuel farms for work, participation in the implementation of energy efficiency improvement programmes on the territory of the Republic of Tatarstan. What other work does your office do?

In addition to the above activities, our institution has a license to conduct educational activities. We conduct pre-certification training of personnel of organisations conducting operations with fuel and energy complex. Electrical and thermal engineering personnel are trained from among administrative and technical, operational and repair workers who have a retraining period of 5 years. They take exams after training at the Volga Rostechnadzor. Successfully, by the way. During the year, we train more than 500 employees, including filling station employees.

Besides, our institution has an electrical laboratory, where, based on requests, we conduct tests of electrical protective equipment — gloves, galoshes, tests of power tools. In 2021, more than 1,100 protective equipment and tools were tested. More than 500 tests have already been conducted in the first half of this year.

We also monitor filling stations located in the republic. We have more than 1,050 such stations owned by 200 owners. We conduct a survey of these filling stations for compliance with the requirements of the normative and technical documentation to ensure the quality of sold motor fuels. We constantly monitor wholesale and stock prices of motor fuels, weekly monitoring of retail prices of motor fuels at filling stations in the republic and in the regions of the Volga Federal District. The results of monitoring the quality and prices of motor fuels at Tatarstan filling stations can be seen on the agency's website for several years. Reports are provided both to the Cabinet of Ministers of the Republic of Tatarstan and to the Office of the President of the Republic of Tatarstan. Information on fuel prices is provided to the Government of the Republic of Tatarstan on a weekly basis.

We also manage the activities of the working group on monitoring the prices of motor fuels, whose main task is to prevent unjustified growth of retail prices at filling stations in our republic.

Another equally important issue is energy efficiency. The main trend of the last decades. What do you think this is related to?

This question is very relevant today. And here's why. The costs of energy resources, such as electricity, thermal energy, boiler and furnace, motor fuels, water, are part of the main costs of the cost of all manufactured products, works and services in the national economy of all countries of the world. Whether it is heavy industry, light industry, agriculture, construction, transport, culture, trade, as well as any institutions.

There are industries where energy costs account for most of the costs in the cost of products. They are also part of utilities. In some seasons, energy costs are more than 50%. Even Western countries are feverish due to rising fuel prices. In Italy, for example, the operation of air conditioners has been banned. The lower the energy costs, the lower the cost of goods and services. It should be borne in mind that there are more low-quality energy resources than high-quality ones. Therefore, it is necessary to deal with both economy and quality. Europe started dealing with these issues earlier than Russia. In 1995, it turned out that energy consumption per unit of GDP was three times more than in European countries.

To date, energy saving programmes are being adopted in Russian regions, as well as in Tatarstan. And as a result, we have achieved some success. But in 2019, it turned out that energy consumption per unit of GDP is still by 62% more than in European countries, and by 40% more than in the whole world.

If we talk about energy surveys, organisations, companies that apply to you, what do they expect to receive after the survey is completed?

Energy surveys are carried out in Tatarstan by order of the government of the republic. By their results, about 40-45 enterprises a year are analysed, a passport is created with recommendations on how to improve the situation and how much it will have to spend.

The most frequent violations that are detected after energy surveys are the absence of water and heat metering devices at enterprises. This was revealed at 12 enterprises in 2021, and in 2022 it has been revealed at two enterprises.

Sometimes energy is paid not according to metering devices, but according to contracts or standards, which can be four times more than according to water and heat metering devices. Besides, we find heat loss through windows, walls of buildings. It reveals the presence of scale in the batteries or the fact that screens are installed on batteries for the sake of aesthetics. You never see this abroad! In this way we shield the heat and heat only the walls. And such moments should be eliminated by the owners themselves.

Another key tool for ensuring energy security is backup fuel. The efficiency and quality of the work of reserve fuel farms in this regard is extremely important. What kind of work is being carried out by the department in this direction? What is the current state of the reserve fuel farms in Tatarstan?

In the Republic of Tatarstan, reserve fuel farms ensure the energy security of the region. Previously, fuel for the CHP was fuel oil, coal and firewood. All these enterprises were prepared for six months or a year. Today, the main fuel is gas, which comes through gas transmission systems. To ensure uninterrupted operation, it is necessary that gas is supplied continuously. But that doesn't happen in real life. There is also a interruption or restriction of gas supply, including due to accidents. This happened in the regions of the Republic of Tatarstan in 2002. In 2022, there was a restriction of gas supply to Europe due to an accident. Therefore, for such cases it is necessary to have a backup fuel economy for gas-consuming enterprises.

In Tatarstan, gas-consuming enterprises that produce heat for industry and the population are under special attention of the government of the Republic of Tatarstan. Every year we compile such a list of companies. We conduct surveys of such organisations on readiness for the winter season, especially on fuel reserves. Mazut must be for 10 days if it is imported by trains. Coal — for 14 days. Diesel fuel in large volumes does not create a reserve, there should be a reserve within two days. And contracts for delivery as needed.

In 2022, we found that out of 81 enterprises, only 64 were prepared. In two — there are no fuel reserves, in 11 — the reserves are below the standards. Some liquidated the reserve farm — like the Kazan Dairy Plant in 2002, Kazenergo in Yudino in 2000. In 2009, Alabuga Sote JSC did not build such a farm, although it was obliged to.

We provide the results of all surveys monthly to the Ministry of Industry and Trade of the Republic of Tatarstan, Ministry of Construction, Architecture and Housing of the Republic of Tatarstan, Ministry of Emergency Situations.

As it has been mentioned earlier, your department also deals with the quality of motor fuels sold in the republic. How many visits have been made by your specialists since the beginning of 2022? How many samples have been taken? To what extent do they comply with accepted standards and requirements?

Since the beginning of 2022, specialists made 424 visits to take samples of motor fuel to check its regulatory quality: 421 times to gas stations, 3 times to oil depots. A total of 916 samples have been taken, 793 have been tested. In four samples, inconsistencies were found in certain indicators of the GOST requirements. For gasoline, one sample is a discrepancy in density and fractional composition. For diesel fuel, three samples — a discrepancy in sulphur content. For comparison: in the first half of 2021, there were 20 cases of non-compliance with standards. And this year there is already a positive trend in the quality of motor fuels sold.

The issue of quality has always been and will be relevant. Special requirements will be imposed on it. If the quality of motor fuels does not meet the requirements of GOST, then such fuel will be consumed more than normal. Secondly, if certain indicators, such as the content of resins and sulphur, do not match, the engines will fail. For example, in 2010, due to the high tar content in gasoline, when refuelling at three filling stations of one of the owners, the engines of more than 550 cars in the republic failed.

Consequently, with poor quality of motor fuels, the owners' costs for the operation and maintenance of cars will be greater than with normal quality. Thirdly, with the content of elements such as sulphur, such fuel worsens the ecological situation in the republic.

Where do they violate more often: large players with a large number of filling stations or are they small participants in the retail market?

There are more than 1,050 filling stations in Tatarstan. Three large companies — TAIF-NK AZS PLC, Lukoil, Tatneft own 47% of filling stations. Individual entrepreneurs — 53% of stations. Large companies sold 72% of the total fuel volume in 2021, and individual enterpreneurs sold 28%.

According to the results of inspections in 2021, 2% of motor fuels that do not comply with GOST were detected at filling stations in Tatarstan. In the first half of 2022 — only 0,5%. In recent years, we have not detected any quality deviations at filling stations in large companies. They have their own quality control service. They know the requirements and fulfill them. In recent years, most violators are individual entrepreneurs and departmental filling stations.

You noted that in the pre-pandemic 2019, the consumption of motor fuel in Tatarstan exceeded 3,5 million tonnes a year. In 2020, coronavirus restrictions led to a decrease in the figure to 2,7 million tonnes a year. What are the final figures for the consumption of motor fuel in Tatarstan in 2021? And what are your outlook for 2022?

Consumption of liquid motor fuel in Tatarstan decreased in 2021, as it was in 2020. But this time the reason is not the pandemic, but that the republic is introducing the transfer of transport to compressed gas. Today, there are 37 stations in the Republic of Tatarstan for the sale of such gas. In 2022-2023, it is planned to build 22 more similar stations. As a result of the conversion of vehicles to gas, it is possible to further reduce the sale of liquid motor fuels. Therefore, filling station owners need to take this moment into account in their activities and consider optimising the number of filling stations taking into account the volume of daily sales. There are filling stations that sell less than 1,000 litres of fuel a day. For normal operation, it is necessary to sell at least 7,000 litres a day. Therefore, some gas stations try to raise fuel prices in order to remain profitable.

Of course, one of the issues that worries almost always and all drivers is gasoline prices. At the very beginning of January this year, a number of experts, including Pavel Bazhenov (president of the Independent Fuel Union), Anna Bodrova (senior analyst at Alpari Research and Analytical Centre), Dmitry Gusev (deputy chairman of the Board of the Nadezhny Partner Association) and a number of others predicted a possible increase in the cost of gasoline, and after it and other fuels by 8-10%. However, since the beginning of 2022, there has been a decrease in prices at gas stations in a number of regions. What is the situation with gasoline prices in Tatarstan now? Why is fuel getting cheaper? And what will happen to prices next?

I am surprised by the forecasts of experts and analysts of the fuel market to increase retail prices from the beginning of 2022. I cannot and will not say why the price of motor fuels in Russia is rising. To do this, you need to have the right and the opportunity to do pricing analytics at motor fuel manufacturers. Our institution has been instructed to prevent unjustified increase in fuel prices. In 2020, prices in the Russian Federation were stable, as selling prices at manufacturing plants and on stock exchanges were stable. Prices were raised twice. But in 2021, the increase in selling prices at factories began and continued constantly. And that's why prices in all regions of the Russian Federation, including Tatarstan, were growing. In 2022, in January, there was an increase in selling and stock prices. In Tatarstan, they also increased by 30-70 kopecks in retail, and since February, the decrease in selling prices at all factories of the Russian Federation began. But retail prices did not immediately begin to lower, they began to decline at filling station in April. And from April to the present, prices remain stable, and they are closer to the minimum for years: AI-95 — 49,30 rubles/l; AI-92 — 45,85 rubles/l; DT — 52 rubles/l.

I cannot predict what will happen to prices in the future, but I believe that there will be no increase in retail fuel prices in the Russian Federation and the Republic of Tatarstan for several months.

Is there any understanding on the part of the controlled structures of the importance and necessity of the management mission? Are everyone ready to provide assistance, or are there still dissatisfied?

Currently, most of the companies we work with, despite the fact that we limit ourselves to recommendations, treat us with understanding. Since 2005, we have conducted 996 energy surveys at Tatarstan enterprises and identified the energy saving potential for them by more than 1,2 billion rubles. Therefore, enterprises should be grateful to us for the analysis and to the government of the Republic of Tatarstan for such a state order, with the money of which we conduct such research.

Official partner:

Lutsya Kashapova