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Russia Imposes Six-Month Ban on Gasoline Exports Starting March 1

EconomyRussia Imposes Six-Month Ban on Gasoline Exports Starting March 1

Russia Implements Six-Month Gasoline Export Ban Starting March 1

Russia has declared a six-month ban on gasoline exports beginning March 1, aiming to secure a sufficient fuel supply to meet domestic demand, particularly with scheduled maintenance activities at refineries on the horizon.

Exemptions from the export restriction include member states of the Eurasian Economic Union, Mongolia, Uzbekistan, as well as two Russian-supported separatist regions of Georgia – South Ossetia and Abkhazia.

The motive behind the export ban is to maintain stability in gasoline and diesel retail prices, with the Russian energy ministry anticipating “zero growth” for at least the next two months. This preemptive measure aims to prevent potential price hikes in the domestic market, especially in light of seasonal refinery maintenance and increased demand expected from farmers preparing for agricultural activities and the upcoming summer driving season.

Last year, Russia enforced a similar ban on gasoline exports from September 21 to November 17 to address rising prices in its domestic market.

Several Russian refineries, including Lukoil’s NORSI oil refinery in Nizhny Novgorod, have experienced disruptions due to drone attacks or unexpected maintenance work, resulting in decreased fuel production. Consequently, wholesale fuel prices in Russia have risen since the beginning of the year.

According to data from the St Petersburg International Mercantile Exchange (SPIMEX) as of February 22, 92-octane gasoline prices surged by 21.3%, while 95-octane gasoline saw a notable increase of 30.4% since January 1.

With the full EU embargo in effect since February 2023, Russia has redirected its gasoline supplies primarily to African countries, replacing Northwest European supplies. In 2023, Russia produced a total of 43.9 million tons of gasoline and exported approximately 5.76 million tons, accounting for around 13% of its production.

The export ban may lead to the resumption of European fuel supplies and an increase in Chinese exports as Russian supplies are removed from international markets.

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