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HomeNewsRussia temporarily bans fuel exports to most countries in response to shortages

Russia temporarily bans fuel exports to most countries in response to shortages

(Reuters)-Russia has temporarily banned exports of gasoline and diesel to all countries outside a circle of four ex-Soviet states with immediate effect in order to stabilise the domestic market, the government said on Thursday.

It said the ban did not apply to fuel supplied under inter-governmental agreements to members of the Moscow-led Eurasian Economic Union, which includes Belarus, Kazakhstan, Armenia and Kyrgyzstan.

“Temporary restrictions will help saturate the fuel market, which in turn will reduce prices for consumers,” the government said in a statement.

The energy ministry said the measure would prevent unauthorised “grey” exports of motor fuels.

The ban is indefinite and further actions will depend on the saturation of the market, according to Russian First Deputy Energy Minister Pavel Sorokin.

“We expect that the market will feel the effect quickly enough. But then it will depend on the saturation of the market and the results,” Sorokin said.

Russia in recent months has suffered shortages of gasoline and diesel. Wholesale fuel prices have spiked, although retail prices are capped to try to curb them in line with official inflation.

The crunch has been especially painful in some parts of Russia’s southern breadbasket, where fuel is crucial for gathering the harvest. A serious crisis could be awkward for the Kremlin as a presidential election looms in March.

Traders say the fuel market has been hit by factors including maintenance at oil refineries, bottlenecks on railways and the weakness of the rouble, which incentivises fuel exports.

Russia has already cut its seaborne diesel and gasoil exports by nearly 30% to about 1.7 million metric tons in the first 20 days of September compared to the same period in August, according to traders and LSEG data.

The government statement added: “Previously, to stabilise the situation on the fuel market, the government raised the mandatory supply volumes of motor gasoline and diesel fuel to the commodity exchange.

“Daily monitoring of fuel purchases for the needs of agricultural producers with prompt adjustment of volumes has also been set up.”

Russia exported 4.817 million tons of gasoline and almost 35 million tons of diesel last year.

SourceReuters
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