Russian oil companies and officials are contemplating a potential ban on diesel exports for firms not engaged in diesel production, following concerns over rising prices and the risk of missing state subsidies, as reported by Russia’s Interfax news agency on Tuesday. Currently, the country has a ban on gasoline exports, which will remain in place until the end of the year.
As of October 1, winter diesel fuel has been included in the wholesale diesel price, leading to increased costs and the possibility that oil refiners may not receive their full “damper payments.” These payments are subsidies aimed at encouraging domestic sales rather than exports at higher prices. Despite these developments, officials assert that diesel supply is more than sufficient to meet domestic demand, which is currently over twice the production level.
According to a statement from the Russian government, both the energy ministry and the federal anti-monopoly service have reported stable prices and a lack of fuel shortages in the country. Just two weeks ago, Deputy Prime Minister Alexander Novak indicated that the government might lift its ban on gasoline exports if a surplus arises in the domestic market.
In mid-August, the government extended the gasoline export ban until December 2024 to ensure stable domestic supply amid seasonal demand and necessary refinery repairs. The 2023 autumn ban on diesel and gasoline exports was implemented to stabilize domestic fuel prices amid soaring costs and shortages, driven by increasing crude oil prices and a weakening ruble. Before these restrictions, the government had raised mandatory supply volumes for motor gasoline and diesel to address supply issues.
Credit: Oil Price (Text Excluding Headline)
