Petroleum product sales
In 2018, sales of petroleum products rose 5.6% year-on-year to 45.91 mt due to an increase in the volume of oil refined at the Company's refineries. Sales were growing across the entire range of products.
Jet fuel sales were up 9.4% reaching 3.84 mt. Key drivers behind the growth were higher passenger traffic at Russian airports during the 2018 FIFA World Cup and the launch of new airline routes from Russia to Europe and Asia. Consistent development of the Group’s cooperation with airlines, conclusion of new contracts and an increasing number of serviced airports both in Russia and abroad also contributed to the growth.
Bitumen sales rose 12.08% to 2.97 mt on the back of development of integrated supply and logistics services and conclusion of long-term direct contracts with leading national market players.
The growth of sales in 2018 was mostly associated with demand on the domestic market where petroleum product sales increased 6.1%.
Cumulative exports of petroleum products and international sales grew 4.6% to 16.24 mt in 2018. The biggest driver of exports was growing sales of naphtha, fuel oil and jet fuel to non-CIS countries. In 2018, actual sales of fuel oil on the domestic and international markets were driven by cost considerations and deemed optimal given the existing demand and price levels.
SALES STRUCTURE BY CHANNEL
Premium sales1 in the reporting period increased 3.7% to 27.1 mt. Sustained growth of premium sales was a result of the product range expansion, production capacity upgrade and implementation of innovative solutions in customer segments.
Focus on jet fuel, premium bitumen and lubricant sales allowed the Company to increase its share in relevant retail segments in the reporting year. Jet fuel and bitumen sales in the premium channels were up 10.2% and 20.7%, respectively. Higher demand in Russia's north-western and Black Sea ports drove a 7.7% year-on-year increase in bunker volumes in 2018. Premium sales of oils and motor fuels increased 6.9% and 1.9%, respectively.
- sales of petroleum products via premium marketing channels, both retail and small wholesale. This group includes all product sales at filling stations and tank farms, as well as into-plane and direct-to-vessel fuelling, small wholesale at refuelling terminals in airports and sea ports;
- sales of premium petroleum products with a higher added value due to advantages over other products in the same category. This group includes sales of packaged products (oils in barrels and cans, polymer modified asphalt cements (PMAC) in clovertainers, etc.), premium-branded liquid lubricants (Gazpromneft, G-Family, Texaco), premium-branded bituminous materials (PMAC, polymer modified bitumens, bitumen emulsions, etc.), all brands of bitumen-based products, and potential wholesale of premium motor fuels (G-Drive, etc.).