Russia To Regulate Fuel Oil Prices During Heating Season

Russia’s President Vladimir Putin has ordered the regulation of fuel oil prices for the heating season in Russia while Moscow’s ban on exports of gasoline and diesel will remain in place “for as long as necessary,” the Kremlin said on Thursday.

Fuel oil, heavily used in Russia’s Arctic regions during the severe winters, will see prices regulated for the 2023/2024 heating season with funds provided by the government, according to a Kremlin document quoted by Reuters.

Meanwhile, Russia will keep the ban on exports of diesel and gasoline “as long as needed” and no specific deadlines for lifting the export restrictions have been set, Putin’s spokesman Dmitry Peskov said on Thursday.

“The government has repeatedly said that there is no deadline here. The ban will be in effect for as long as necessary. As soon as the need for a ban disappears, other measures will be considered,” Peskov told reporters in Moscow when asked when the ban could be lifted.

Two weeks ago, Russia surprised the markets by announcing a temporary ban on exports of gasoline and diesel to stabilize domestic fuel prices amid soaring crude prices and a weak Russian ruble. Diesel and gasoline exports are now temporarily banned to all countries except for four former Soviet states—Belarus, Armenia, Kazakhstan, and Kyrgyzstan.

Last week, Russia tweaked its export limitations on fuels, lifting the temporary ban on exports of low-quality high-sulfur diesel and marine fuel and allowing the export of fuel supplies that already had loading papers and were accepted for export to proceed.  

Since the ban was introduced on September 21, gasoline prices have dropped by 10-11%, while the price of diesel locally has declined by nearly 15%, according to Russian news agency TASS.

Analysts don’t expect a prolonged ban because of Russia’s limited storage capacity which, once full, could force refiners to cut processing rates.

By Tsvetana Paraskova for Oilprice.com

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