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Main macroeconomic factors affecting performance results

The main factors affecting the Group’s performance results are as follows:

  • change in market prices for oil and petroleum products;
  • change in the RUB/USD exchange rate and inflation;
  • taxation;
  • change in the tariffs for the transportation of oil and petroleum products.

Сhange in market prices for oil and petroleum products

The price of oil and petroleum products on the global and Russian markets is the main factor that influences the Group’s performance results.

Petroleum product prices on the global market are primarily determined by the level of global oil prices, the supply of and demand for petroleum products and the level of competition on different markets. Price dynamics on the international market, in turn, influence prices on the domestic market. The price dynamics vary for different types of petroleum products.

A significant decline in oil and petroleum product prices on the international market over the 12 months of 2015 had a negative effect on the Group’s results. Part of the negative impact from the drop in international prices was offset by the growth in the USD exchange rate versus the RUB.

Price dynamics for oil and petroleum products
2014 2015 Change, %
International market (USD/barrel)
Brent oil 98,95 52,46 (47,0)
Urals oil (avg. Med and NWE) 96,94 51,49 (46,9)
(USD/T)
Premium petrol (avg. NWE) 918,72 569,96 (38,0)
Naphtha (avg. Med and NWE) 825,28 450,05 (45,5)
Diesel fuel (avg. NWE) 854,41 500,70 (41,4)
Gasoil 0.2% (avg. Med) 837,77 486,26 (42,0)
Fuel oil 3.5% (avg. NWE) 518,48 247,49 (52,3)
Domestic market (RUB/T)
High-octane petrol 31 948 32 488 1,7
Low-octane petrol 28 071 28 435 1,3
Diesel fuel 27 764 28 944 4,2
Fuel oil 9 014 7 202 (20,1)

Source: Platts (international market), Kortes (domestic market)

Сhange in RUB/USD exchange rate and inflation

The Group’s management has decided that the Russian rouble shall be the Company’s reporting presentation currency. The functional currency of each subsidiary shall be the currency of the economic environment in which the company is engaged in operations, which is the Russian rouble for most companies.

Rouble exchange rate and inflation
2014 2015
Change in consumer price index (CPI), % 11,4 12,9
Average RUB exchange rate vs. USD for the period, RUB 38,42 60,96
RUB exchange rate vs. USD at the start of the period, RUB 32,73 56,26
RUB exchange rate vs. USD at the end of the period, RUB 56,26 72,88
Change in the RUB exchange rate vs. USD for the period (in USD), % — 72,0 — 30,0

Source: Company data