In a move to stabilize domestic fuel prices, the Russian government is contemplating a significant step: a temporary ban on the export of oil products. This decision comes as a response to the ongoing domestic fuel shortage in Russia, despite being one of the world’s largest oil producers.
Exploring the Options
According to a reliable source cited by the TASS news agency, one of the options on the table is imposing a complete ban on the export of oil products. Alternatively, authorities are also considering raising the oil products export duty to a substantial $250 per tonne.
Incentives for Compliance
Companies that adhere to the Ministry of Energy’s quotas for supplying petroleum products to the domestic market will be eligible for a reimbursement of the export duty. This intriguing development was reported by the Interfax agency, relying on insider information.
The Root Causes
The pressing issue of a domestic fuel shortage in Russia has arisen due to several contributing factors. Modernization efforts at refineries, coupled with infrastructure bottlenecks, have strained the supply chain. Additionally, the situation has been exacerbated by a weaker Russian ruble following the country’s invasion of Ukraine in February 2022, which led to increased borrowing costs.
Market sources have warned that the fuel shortage may worsen in the coming months. This is a matter of concern not only for Russia but also for the global energy landscape, given Russia’s substantial role as a major oil producer.