April 24, 2024

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Russia stops gasoline exports for 6 months

Russia stops gasoline exports for 6 months

Russia decided on Tuesday to impose a ban on gasoline exports for a period of six months, starting next March 1. The move aims to keep fuel prices stable amid rising demand from consumers and farmers while allowing the country, the world's second-largest oil exporter, to maintain its refineries.

A spokeswoman for Deputy Prime Minister Alexander Novak, the person in charge of the Russian energy sector under President Vladimir Putin, confirmed the order to ban gasoline exports, which was first reported by the Russian network RBC.

Prime Minister Mikhail Mishustin approved the ban proposed by Novak in a letter dated February 21, RBC reported, citing an unidentified source. A second source told Reuters that the decision had been taken but the relevant decree had not yet been issued.

“In order to compensate for the excessive demand for petroleum products, it is necessary to take measures to stabilize prices on the domestic market,” Novak was quoted as saying in his proposal, according to RBC.

Gasoline prices are a sensitive issue for drivers and farmers in Russia, the world's largest exporter of wheat, ahead of the presidential elections scheduled for March 15-17, at a time when some Russian refineries were recently attacked by Ukrainian militants with manned aircraft. Months.

Russia and Ukraine have targeted each other's energy infrastructure in an attempt to hit each other's military supply lines and discourage their rivals as they seek a battlefield advantage after nearly two years of war that does not appear to be ending soon, Reuters reports.

Exports of oil, petroleum products and natural gas are Russia's main export products and a major source of foreign exchange earnings for Russia's $1.9 trillion economy. dollars, while ensuring Moscow a place among the main players on the global energy chessboard.

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After all, the Kremlin is closely cooperating with Saudi Arabia, the world's largest oil exporter, within the framework of OPEC+, trying to keep crude oil prices high, with Russia already voluntarily reducing oil and fuel exports by 500,000 barrels per day. In the first quarter to achieve this goal.

Increase in gasoline prices

The ban, as we mentioned above, aims to stabilize fuel prices, which have been rising since the beginning of the year. According to prices on February 26 on the Saint Petersburg International Stock Exchange (SPIMEX), the price of 92 octane gasoline has increased by 22% since January 1, while the price of 95 octane gasoline has increased by 32%. After the export ban was announced, the price of 92 octane gasoline fell by 3.3%.

The price of 95 octane gasoline in Russia is about 62 US cents per liter, compared to more than $2.05 in Western Europe.

The largest gasoline producers in Russia in 2023 are Gazprom Neft's Omsk refinery, Lukoil's Norsi oil refinery in Nizhny Novgorod, and Rosneft's Ryazan refinery.

In 2023, Russia produced 43.9 million tons of gasoline, and exported about 5.76 million tons, or about 13% of its total production. The largest importers of Russian gasoline are mainly African countries, such as Nigeria, Libya, Tunisia and the United Arab Emirates.

Meanwhile, Russia last month reduced gasoline exports to countries outside the CIS to offset production cuts due to emergency repairs at the country's refineries that sparked fires and drone attacks.

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It is noteworthy that last year, Russia also banned the export of gasoline between September and November in order to deal with high domestic prices and fuel shortages.

But this time, the ban will not apply to Eurasian Economic Union member states, Mongolia, Uzbekistan and two Russian-backed separatist regions in Georgia – South Ossetia and Abkhazia.