The Russian government has implemented temporary restrictions on the export of certain fuel in an effort to stabilize the domestic market, according to an announcement by the press service of the Council of Ministers on Thursday.
The restrictions, which went into effect immediately, cover the export of commercial gasoline and diesel fuel. However, the exact duration of the measure has not been specified.
Exceptions to the ban include fuel sales to countries within the Eurasian Economic Union (EAEU) under intergovernmental agreements. Additionally, humanitarian aid shipments, transit supplies moving between Russian regions through other countries, fuel exports for Russian military units in foreign territories, Russian entities operating at the Baikonur Cosmodrome, and those on Spitsbergen are exempted.
Exports currently going through EAEU customs, supplies to Abkhazia and South Ossetia, and fuel intended for personal use are also not affected by the ban.
The Russian government expects that this restriction will not only stabilize the domestic market but also curb “gray” exports, which involve underreported or evaded official tariff payments. The Russian Energy Ministry believes that this measure has the potential to alleviate domestic fuel prices. It’s important to note that this ban is temporary in nature.
In recent months, market prices for gasoline and diesel fuel in Russia have reached record levels. Last week, the government considered two potential solutions to address this issue. One option was to impose a complete ban on the export of petroleum products for a specific period, while the other was to increase the export duty on petroleum products to $250 per ton.
However, the Russian Energy Ministry clarified that increasing the export duty on petroleum products was discarded due to the government’s inability to compensate refineries. The ministry pointed out that the surge in domestic fuel prices resulted from the devaluation of the ruble, which has affected oil and petroleum product exports, as well as the global shortage of diesel fuel.
As a result of the restrictions, gasoline prices on the commodity exchange in Russia experienced a notable decrease of approximately 5%, while diesel prices saw a more moderate drop of over 2%.
According to data from Rosstat, retail prices for gasoline and diesel fuel have risen by 9.4% since the beginning of 2023 until September 18. Russian President Vladimir Putin has acknowledged this issue, stating that the government failed to react promptly to changes in the global market caused by increasing oil prices.
The Russian government’s temporary fuel export restrictions aim to stabilize the domestic market and combat “gray” exports. It is expected that these measures will help alleviate the surge in fuel prices and address the impact of the ruble’s devaluation and the global diesel fuel shortage.