Russian aviation kerosene price rises to 121,900 rubles per tonne

en.Wedoany.com Reported - On August 20, the transaction price of Russian aviation kerosene at the Saint Petersburg International Mercantile Exchange rose to 121,864 rubles per tonne, setting a historical record for this product and up 34.8% from the previous high of 90,401 rubles per tonne recorded in early May.

Since the beginning of the year, the exchange price of Russian aviation kerosene has risen by approximately 60% in cumulative terms. The over-the-counter (OTC) market has strengthened in tandem, with quotes reaching 110,401 rubles per tonne on August 19, up 8% from the start of that week and roughly 1.5 times the level at the beginning of the year. The simultaneous rise in both exchange and OTC prices indicates that price pressure has spread from localized transactions to the broader wholesale market.

It should be noted that the above data refer to wholesale quotes for aviation kerosene and do not equate to the "into-wing" price offered by airports to airlines. The final procurement cost for airlines also includes storage and transportation, airport services, refueling, and regional supply premiums. Therefore, an increase in exchange prices typically takes time to transmit to aviation operating costs. Fuel accounts for a significant share of airline operating expenses; if high prices persist, they may compress carrier margins and increase pressure for fare adjustments and higher fuel surcharges.

On the supply side, the Russian market is affected by refinery maintenance, fluctuations in some refining capacities, and increased difficulties in logistics coordination. Meanwhile, the peak air travel season has boosted fuel demand, heightening market attention to available tradable volumes. NEFT Research believes that Russia has ceased publishing some aviation kerosene production data, and the reduced information transparency makes it difficult for traders to accurately assess actual supply-demand conditions, which may also amplify short-term price volatility.

The Russian government has introduced administrative measures to stabilize domestic supply. Under Government Decree No. 646 signed on May 30, Russia suspended exports of aviation kerosene, including goods purchased through commodity exchanges, with the restrictions remaining in effect until November 30; supplies under intergovernmental agreements and goods that had completed customs formalities before the ban took effect are eligible for exemptions.

On August 10, the Russian Ministry of Energy stated that aviation kerosene inventories at the beginning of the month remained at normal levels for the product, with August production expected to grow 4% month-on-month and recover to the level of the same period in 2025; existing production capacity can cover domestic consumption, and inventories can be further increased if necessary. This assessment contrasts with the rapid rise in market prices, suggesting that current high prices may reflect not only changes in national aggregate volumes but also the amount of spot supply available on the exchange, regional distribution, and market expectations.

Russia has also reduced airlines' fuel expenditures through an aviation kerosene price compensation mechanism. According to Reuters calculations, the aviation kerosene damping subsidy for May 2026 was 27,986 rubles per tonne, down 41% from April, equivalent to approximately 31% of the average exchange wholesale price for that month. The subsidy can cushion part of the costs, but the compensation level is linked to export substitution prices, benchmark prices, and tax parameters, and cannot fully offset the rise in domestic spot prices.

At present, export restrictions and expectations of higher production are helping to increase domestically available resources, but whether prices can subsequently decline still depends on refinery operations, exchange offering volumes, peak-season aviation demand, and the coordination of supply across various regions.