Russia is temporarily restricting exports of gasoline and diesel to stabilize fuel prices on the domestic market, the Russian government said on Thursday, ending weeks of speculation that authorities would limit exports in the face of soaring prices and shortages due to higher crude prices and weak Russian ruble.
"The temporary restrictions will help raise supply on the fuel market, which in turn will reduce prices for consumers," the Russian government said.
Before the temporary restrictions were enacted, Russia had raised the mandatory supply volumes of motor gasoline and diesel fuel to the commodity exchange to help ease the supply crunch.
Last week, reports emerged that Russia was considering banning refined product exports to stabilize the domestic gasoline and diesel prices.
Russia has been considering a fuel export ban since May in an effort to avert domestic fuel shortages and rein in prices after announcing a halving of subsidies to oil refiners that will start this month in order to keep more money in government coffers to fund its military operation in Ukraine.
Russia was already said to be preparing to slash its diesel exports from its ports on the Baltic and Black Seas by nearly 25% in September compared to the export plans for August. The plan for diesel exports in September lays out the lowest shipments since May this year when spring refinery maintenance was in place, according to industry data reported by Bloomberg earlier this month.
Belarus, a close ally of Russia, has helped Russia with fuel supply in recent weeks, and Belarusian President Alexander Lukashenko said last week it was ready to further increase supplies if needed. Belarus has supplied 60,000 tons of diesel and gasoline each to Russia, Russian news agency Interfax quoted Lukashenko as saying. The Belarusian president is one of the very few allies Putin has left after the Russian invasion of Ukraine.
Lower diesel supply out of Russia would not only reduce Putin's revenues but could also tighten an already tight global diesel market.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More
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