* Companies to start accumulating reserves in July-Aug
* State-owned Rosneftegaz holding to buy fuel from companies
(Adds details, comments, background)
By Vladimir Soldatkin
MOSCOW, July 13 Russia will build a strategic
reserve of refined oil products to stave off future shortages
and high prices, parallel to stocks in the West supervised by
the International Energy Agency.
Its energy minister said on Wednesday that Russian oil
companies will put up to 2 million tonnes of fuel into reserves
for use in market interventions.
Several regions suffered severe fuel shortatges in spring
after heavy exports triggered by domestic price caps.
Insufficient high-grade gasoline refining capacity also
contributed to the shortage, a political headache for the
government prior to parliamentary elections in December and a
presidential poll next spring.
Last week, Prime Minister Vladimir Putin outlined several
ways to reform Russia's downstream sector, including the
possible creation of emergency fuel reserves.
"The real action to accumulate reserves will start in
July-August," Sergei Shmatko told a news conference, adding that
the reserves would amount to 2 million tonnes comparing to
Russia's annual production of around 250 million tonnes.
Average monthly gasoline demand is 2.5 million tonnes but
consumption soars in the summer when Russians travel to country
He said that during the fuel crisis in Russia in April, "a
few thousands tonnes" would have covered the shortage. Exports
for the first three months of the year were up by 600,000 tonnes
of gasoline, with production flat.
Russia, still the world's largest oil producer despite
higher Saudi Arabian production, has been fighting rising prices
through soft price caps and protective gasoline export tariffs.
The IEA, by contrast, orchestrated the release of emergency
reserves, adding supply to cushion struggling economies from the
effects of high prices caused by the loss of Libyan exports.
Russia's move "is undoing the IEA stock release, which
hardly had any effect anyway. They'll just hold production
behind," a European gasoline trader said.
Shmatko said interventions would take place when prices
started to rise excessively or when a region began to suffer
shortages of fuel, particularly diesel, gasoline and jet fuel.
He didn't give a breakdown of the volumes for each type of
fuel the state is expected to set aside for the proposed fund.
"The Rosneftegaz holding will buy (fuel from companies)...
Several companies have already signed deals," Shmatko said,
referring to the state-owned holding company that owns Russia's
top oil producer Rosneft .
But traders said the start of physical sales could be
postponed until the peak summer driving season is over.
"I guess it could be postponed till autumn or winter," a
The minister also told the news conference that the fuel in
reserve would be stored at companies' own refineries, facilities
owned by Transnefteproduct, a subsidiary of oil pipeline
monopoly Transneft (TRNF_p.MM), or at state reserves facilities.
(Reporting by Vladimir Soldatkin; additional reporting by
Jessica Donati in London; editing by William Hardy)