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Saturday, April 13, 2024

Russia Implements Six-Month Gasoline Export Suspension to Stabilize Domestic Market

Russia plans to suspend gasoline exports for six months to manage high demand and stabilize prices in the domestic market, as approved by Prime Minister Mishustin, with exemptions for certain regions and a focus on increasing diesel supply.

Russia will suspend gasoline exports for six months starting in March to ensure sufficient supply for the domestic market during high demand season, the RBK daily reported on Tuesday.

According to a government source familiar with the matter, Russian Prime Minister Mikhail Mishustin has approved the measure, which will come into force on March 1.

The RBK article stated that earlier this month Deputy Prime Minister Alexander Novak wrote a letter to the government calling for a temporary suspension of gasoline exports as the domestic market enters peak season for fuel demand.

He attributed the growing demand to increased usage in the agricultural sector and upcoming seasonal maintenance at refineries. These factors will tighten domestic supply, Novak reportedly said in his letter.

“In order to level out the rush demand for petroleum products, it is necessary to take measures to help stabilize prices in the domestic petroleum product market,” the deputy prime minister suggested.

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Novak’s spokesperson confirmed to RBK that the decision to restrict gasoline exports had been made.

The ban will not apply to previously agreed volumes of supplies to the Eurasian Economic Union bloc of post-Soviet countries, as well as to Mongolia, Uzbekistan, Abkhazia, and South Ossetia, the outlet noted.

Novak also reportedly proposed increasing volumes of diesel available for sale on the domestic commodity exchange in order to ensure adequate supply and prices. This type of fuel is widely used in farming.

This would be the second gasoline export ban Russia has enacted in less than six months. Last September, the government also temporarily restricted exports to stabilize the domestic market. The ban also included diesel, which caused a price surge in a global oil market that was already tight due to supply cuts by Russia and Saudi Arabia. The upcoming restrictions, however, will not apply to diesel exports.