Russia to Ease Diesel Export Ban with Price-Control Quotas Soon
Russia is likely to relax a ban on pipeline exports of diesel in a few days with quotas to prevent price spikes.
The ban on gasoline exports will continue for now, as per the daily Kommersant, citing unknown sources.
Despite being the top oil producer, Russia has faced recent fuel shortages locally. It was because of refineries’ maintenance, the weak ruble, and higher export prices that incentivized the local refineries to sell their products abroad.
As a result, on September 21, the Russian government temporarily imposed a complete ban on gasoline and diesel exports to shun inflation and ease supplies. The ban was for all countries, however, it continued supplies to Kazakhstan, Kyrgyzstan, Belarus, and Armenia.
Russian Minister for Energy Nikolai Shulginov told the TASS news agency that the government had discussed partial permission for fuel exports at all levels. We will announce further decisions soon.
Deputy Prime Minister Alexander Novak was to meet and discuss “maybe making the ban less strict” with oil companies on Wednesday, but his office hasn’t replied to questions yet, the newspaper said.
Novak said last week that Russia might introduce ‘quotas on fuel exports’ if the ban fails to lower domestic gasoline and diesel prices. Prices of these products have reduced almost 10 percent and 23 percent, respectively, since the ban was imposed.
The oil pipeline monopoly Transneft storage facilities are almost full. It has struggled to redirect all supplies to the domestic market.
On Tuesday, Novak also said, “The government had not set a time frame for the fuel export ban.”
The message drew mixed reactions from analysts. JP Morgan reacted, saying it could last until October. FGE Energy was of the view that it could take up to two months to replenish Russia’s gasoline stocks.
Notably, in its recent report, Citigroup forecast crude oil prices to drop to $70 per barrel in the coming year due to reduced demand, driven by the expected ‘peak transport fuel demand.’ Currently, at $92, the rise resulted from production cuts. A global surplus is foreseen, bringing stability at $70 per barrel, with concerns about inflation and demand constraints due to pandemic recovery easing off.
