Main macroeconomic factors affecting operational results
The main factors affecting the Group’s operational results include:
- Changes in market prices for crude oil and petroleum products;
- Changes in the exchange rate between the Russian rouble and the US dollar; inflation;
- Taxation;
- Changes in transportation tariffs for crude oil and petroleum products.
Changes in market prices for crude oil and petroleum products
Prices for crude oil and petroleum products on international and Russian markets are the primary factor affecting the Group’s operational results.
Petroleum product prices on international markets are primarily determined by world prices for crude oil, petroleum product supply and demand, and competition on different markets. Petroleum product price trends on international markets in turn determine domestic prices. Price trends are different for different types of petroleum products.
The decrease in crude oil and petroleum product prices on international markets in 12 months 2016 had a negative impact on the Group’s results, but the drop in oil prices was largely offset by changes in the exchange rate for the US dollar relative to the Russian rouble.
| 2015 | 2016 | ∆, % | |
|---|---|---|---|
| International market (USD/ barrel) | |||
| Brent | 52.46 | 43.73 | (16.6) |
| Urals Spot (average Med + NWE) | 51.49 | 42.02 | (18.4) |
| International market (USD/ barrel) | |||
| Premium gasoline (average NWE) | 569.96 | 467.05 | (18.1) |
| Naphtha (average Med. + NWE) | 450.05 | 377.85 | (16) |
| Diesel fuel (average NWE) | 500.7 | 398.58 | (20.4) |
| Gasoil 0.1% (average Med.) | 486.26 | 391.21 | (19.5) |
| Fuel oil 3.5% (average NWE) | 247.49 | 199.93 | (19.2) |
| Domestic market (RUB/t) | |||
| High-octane gasoline | 32,488 | 34,574 | 6.4 |
| Low-octane gasoline | 28,435 | 29,858 | 5 |
| Diesel fuel | 28,944 | 27,965 | (3.4) |
| Fuel oil | 7,202 | 6,051 | (16) |
ROUBLE vs. US dollar exchange rate and inflation
The Group’s management has determined that the Russian rouble is the presentation currency for the Group’s financial statement. The functional currency of each subsidiary is considered the currency of the economic environment in which the company does business and is the Russian rouble for most subsidiaries.
| 2015 | 2016 | |
|---|---|---|
| Change in Consumer Price Index, % | 12.9 | 5.4 |
| Average RUB/USD exchange rate for the period | 60.96 | 67.03 |
| USD/ RUB exchange rate as of the beginning of the period | 56.26 | 72.88 |
| USD/ RUB exchange rate as of the end of the period | 72.88 | 60.66 |
| Depreciation (appreciation) of Russian rouble to USD, % | 30 | 17 |
Hydrocarbon taxes
| 2015 | 2016 | ∆, % | |
|---|---|---|---|
| Export duty, (USD/ t) | |||
| Crude oil | 120.25 | 75.61 | (37.1) |
| Light petroleum products | 57.67 | 30.21 | (47.6) |
| Diesel | 57.67 | 30.21 | (47.6) |
| Gasoline | 93.75 | 46.07 | (50.9) |
| Naphtha | 102.17 | 53.63 | (47.5) |
| Heavy petroleum products | 91.34 | 61.96 | (32.2) |
| Mineral extraction tax | |||
| Crude oil (RUB/t) | 6,326 | 5,770 | (8.8) |