Russia imposes temporary restrictions on fuel exports to stabilize domestic market

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Russia has introduced temporary restrictions on exports of gasoline and diesel in order to stabilize the domestic market, the government said on Thursday.

It did not specify how the restrictions would work. The energy ministry said separately that they would prevent unauthorized “gray” exports of motor fuels.

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

Government officials have said that the plans are intended to restrict fuel exports only to those who make the oil products, in order to avert a large-scale fuel crisis; a prohibitive duty on fuel exports has been considered.

In recent months Russia 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.

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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 ruble, which incentivizes fuel exports.

Russia has already cut its seaborne diesel and gasoil exports by nearly 30 percent 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 stabilize 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.

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