Two week ban
Putin stops diesel export ban
October 6, 2023, 10:08 a.m
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Russian refineries can earn more from fuel abroad than on the domestic market. As a result, there are bottlenecks locally and the Kremlin imposes an export ban. Prices are skyrocketing in Europe. But now diesel can be exported again – under conditions.
Just over two weeks after the ban, Russia is again allowing its exporters to export diesel by sea. This is what the financial news agency reports Bloomberg. The ban had thrown world markets into turmoil. Diesel prices in Europe had exploded, as Russia is the largest exporter of diesel fuel by sea.
Gasoline exports remain restricted, the Reuters news agency reports. The background to the ban is a shortage of gasoline and diesel, which was particularly lacking for the harvest in the south of the country. Despite Western sanctions following the attack on Ukraine, Russian refineries enjoy high export prices, which is why they prefer to sell their products abroad. In addition to the fuel shortage, Russia is suffering from high heating oil prices.
According to the Russian online portal Fontanka, the export ban had only a minor effect on prices at Russian gas stations. Prices on the fuel exchange on Thursday were roughly at the same level as two weeks ago.
Requirements, but also subsidies
Diesel can now be exported again if the fuel is transported by pipeline to Russian ports. According to Bloomberg, companies that do not produce diesel themselves but export fuel purchased domestically have to pay high export duties. In addition, according to Reuters, producers are obliged to reserve at least 50 percent for the domestic market.
According to the Bloomberg report, in order to meet domestic demand, the Russian government is subsidizing fuels as heavily as before: the refineries receive compensation for the difference between domestic and foreign prices.
In order to curb heating oil prices before the onset of winter, the Russian government also wants to provide state funds, as the presidential office announced on Thursday. The Kremlin website also mentioned the introduction of price regulation for heating oil.