Russia bans diesel exports as shortages bite

Moscow — Russia has temporarily banned exports of fuel including diesel to all countries outside a circle of four former Soviet states with immediate effect 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.

In recent months Russia has suffered shortages of petrol and diesel. Wholesale fuel prices have spiked, though 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. Sanctions have also had an impact.

Russia has already cut its seaborne diesel and gas oil exports by nearly 30% to about 1.7-million metric tonnes 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 tonnes of petrol and almost 35-million tonnes of diesel last year.

Reuters