According to Kommersant, Mayor of Moscow Sergey Sobyanin has said that the city authorities are to ban sales of gasoline and diesel fuel of ecological class lower than Euro-4 from 1 January 2013.
We do not expect any shortage of motor fuels as a result. However, we are reiterating our view that financial motivation is notably more efficient than administrative pressure. In addition, recent developments on an increase in excise for Euro4-5 motor fuels, which could destroy most of the incentives to invest in quality upgrades, also do not improve the attractiveness of investing in refining (either quality or depth). We see this news as neutral for Russian oils.
Dmitry Loukashov, Alexander Kirevnin, Ekaterina Rodina, Elena Kopylova, Mikhail Zarkhi
VTB Capital analyst
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