The Russian government has taken radical measures to stabilize oil product prices. As of September 21, the export of commercial gasoline and diesel fuel from Russia has been temporarily suspended. Market participants expect that the embargo will not last longer than a month, though specific timelines are unclear. In the event of an extended embargo, oil refineries may be forced to reduce processing due to an oversupply of diesel fuel.
Russian Prime Minister Mikhail Mishustin signed a government resolution implementing a temporary ban on the export of gasoline and diesel fuel from Russia. The document came into effect on September 21. The ban is intended to stabilize the situation in the domestic oil product market, where prices reached their maximum values multiple times in the summer of 2023. The Ministry of Energy explained that the restrictions aim to curb gray exports of motor fuels and should saturate the domestic market. Following their implementation, the ministry expects an increase in the supply of oil products on the domestic market.
The government has not disclosed the duration of the resolution.
There are exceptions to the export ban. Specifically, the export of commercial fuel is allowed to Abkhazia and South Ossetia, countries of the Eurasian Economic Union (EEU), as well as under intergovernmental agreements. Additionally, the restrictions will not affect humanitarian aid, transit, the provision of fuel to foreign military formations, and fuel for personal use by citizens.
The decision to impose the ban followed the realization that time would be needed to coordinate and implement a protective export duty on fuel, which would require amendments to the customs tariff law and possibly the Tax Code.
The export ban applies to the export of commercial gasoline and diesel fuel and does not extend to straight-run gasoline, heavy distillates, and products with sulfur content exceeding 0.05%. As a result, simple oil refineries may continue exports, while complex refineries may increase the production of non-commercial products, including sulfur-containing diesel fuel (prohibited for circulation in Russia), as well as kerosene and mazut, which are not subject to restrictions.
The imposed export ban is the most stringent of possible regulatory measures. It is expected to provide the government with time to prepare more systematic solutions in the form of protective export duties.
Source: Kommersant
