Farmers continue to report a shortage of diesel fuel

The relevant associations are appealing to the authorities to take urgent measures to resolve the issue. Thus, the Association of Peasant Farms and Agricultural Cooperatives (AKKOR), in its letter to Prime Minister Mikhail Mishustin (a copy is at the disposal of Agroinvestor), notes that in August prices for diesel fuel for agricultural producers increased sharply - from 54 rubles . /l up to 75 rub./l. The national average growth was 30-40%. And from September 1, fuel companies notified that the price would increase to 80 rubles per liter.

“Today,  the Russian Ministry of Agriculture  is providing state support funds in a timely manner, is taking measures to organize harvesting work, and is looking for new markets for farm products,” says AKKOR’s letter to Mishustin. “However, due to the strong disparity in prices for products and resources, farmers are forced to stop investments , reduce the amount of fertilizers used, and simplify technologies. For many farms, the issue of survival is acute. This can lead to a drop in yields and gross receipts. In conditions of declining production, there is a risk of rising food prices for consumers.” In this regard, the association asks the Prime Minister to urgently cancel the excise tax on diesel fuel and equalize prices for fuel and lubricants.

According to the association “People's Farmer of Kuban”, over three months the increase in prices for diesel fuel in the Krasnodar Territory will be 91%. “Diesel fuel has jumped over the 100 thousand rubles/t bar with a margin, setting an anti-record for agriculture and many other industries - from September 5 the price will be 108 thousand rubles/t. Back in June 2023, it cost 56.5 thousand rubles/t,” the association reports on its TELEGRAM channel.

Also, according to Kommersant, the chairman of the Association of Gardeners and Nurserymen of the Stavropol Territory, Aidyn Shirinov, sent a letter to the Federation Council Committee on Agricultural and Food Policy and Environmental Management. In it, he asks senators to assist in stabilizing the situation with the supply of diesel fuel to agricultural producers. Now the farmers of the Stavropol region are in a very difficult situation, since diesel fuel for agricultural producers is shipped only from oil depots in the Volgograd region. There is no fuel at the Stavropol oil depots, and farmers currently have no more than 40% of the total need. In addition, diesel fuel has risen in price by more than 40% since June 1.

Independent grain market expert Alexander Korbut says that an increase in diesel fuel prices is observed in all regions where winter sowing is underway. “The situation is extremely unpleasant. Let's assume that for the South, the timing of winter sowing can reach November, but for other regions this is already difficult. The question is how winter sowing will take place, what volumes it will have,” Korbut commented to Agroivnestor. According to the plans of the Ministry of Agriculture, the sowing area will be about 20 million hectares, he adds. However, at the moment, the harvesting campaign is still underway, and harvesting will be a priority for farmers, the expert believes. In any case, he is sure, a ton of diesel fuel should not cost as much as nine tons of wheat - this is inadequate.

Acting DIRECTOR of the Rassvet company (part of the Progress Agro Group of Companies) Dmitry Dubovikov says that he has not yet observed a fuel shortage. “For many years, Progress Agro has been creating a supply of fuel for the uninterrupted operation of our machinery, equipment and the entire farm. There is always a safety stock. This year they did it even a little more than usual. The company has storage tanks and its own gas stations. Currently deliveries are made almost every week. Now we are not experiencing any problems,” Dubovikov commented. 

However, according to him, since May 2023, fuel has gradually become more expensive and increased in price by 28%, with the peak of growth occurring in August. But this has not yet affected the company’s work due to existing reserves. True, Dubovikov continues, the increase in prices may affect the price of the services of carriers who work for Progress Agro. “It is possible that fuel costs will rise,” he adds. According to Dubovikov, the state, in order to support agricultural producers, should consider the issue of cost compensation for the agricultural sector, since there has been such a sharp jump in fuel prices.

The general director of the Progress agricultural company (Krasnodar Territory), Alexander Nezhenets, calls the fuel situation extremely tense. According to him, now we are talking about a price of 100 thousand rubles/t, at the beginning of August a ton cost 73 thousand rubles, at the beginning of September - 83 thousand rubles, in the spring - 43 thousand rubles/t. “There is not enough fuel, it has disappeared from gas stations <...>. We are very worried about whether we will be able to prepare the soil and sow in the fall. The situation is critical,” said Nezhenets. 

According to him, resolving the issue is within the competence of the federal Ministry of Agriculture, the government and the president - they are in charge of the possible cessation of diesel fuel exports. They should also affect the operation of the railway: the fuel supplier for Progress claims that the tanks were shipped on July 31, but never reached the region. “Of course, the president and the government should also stop oil companies with their price increases,” Nezhenets said. Korbut says that relevant departments are holding meetings to resolve the problem, and the Ministry of Energy has promised to sort out the deficit within two weeks. But the question is whether they will sort out the prices. “If they impose EXPORT restrictionsdiesel fuel, this will lead to the opposite situation: exporters will try to sell as much as possible to foreign markets during the remaining period (before the restrictions begin),” he believes.