Russia to ban gasoline exports for 6 months

On Tuesday, 27 February 2024, Russia announced a six-month prohibition on gasoline exports starting March 1st. The aim is to stabilize prices in response to increased demand from both consumers and farmers, as well as to facilitate refinery maintenance in Russia, which stands as the world’s second-largest oil exporter. This measure, initially disclosed by Russia’s RBC, was verified by a spokesperson for Deputy Prime Minister Alexander Novak, who oversees the country’s extensive energy domain on behalf of President Vladimir Putin.

According to an unnamed source reported by RBC, Prime Minister Mikhail Mishustin sanctioned the ban following a proposal from Novak dated February 21st. Novak, quoted by RBC, emphasized the need for measures to stabilize prices domestically amid excessive demand for petroleum products. This move comes as domestic gasoline prices hold significant importance for motorists and farmers in the world’s leading wheat exporter, especially with a presidential election scheduled for March 15-17. Furthermore, some Russian refineries have faced challenges due to drone attacks from Ukraine in recent months, triggered by an unprovoked and aggressive Russian war against Ukraine.

For the past two years of Russian invasion of Ukraine, both states have been targeting each other’s energy infrastructure. Their aim is to disrupt supply lines, logistics, and undermine morale among their respective populations and troops. Oil, oil products, and gas exports constitute the largest portion of Russia’s exports, serving as a crucial source of foreign currency revenue for its $1.9 trillion economy and securing Moscow’s influential position in global energy politics.

The Kremlin has collaborated closely with Saudi Arabia, the world’s leading oil exporter, to maintain elevated oil prices as part of the broader OPEC+ alliance, which includes the Organization of the Petroleum Exporting Countries and key allies. Russia has already taken voluntary measures to curtail its oil and fuel exports by 500,000 barrels per day in the first quarter of 2024, aligning with OPEC+ initiatives aimed at bolstering prices.

In terms of gasoline production, the primary players in Russia in 2023 included Gazprom Neft’s Omsk refinery, Lukoil’s NORSI oil refinery in Nizhny Novgorod, and Rosneft’s Ryazan refinery.

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