Russia Bans Gasoline Exports to Tackle Shortages and High Prices

Russia Bans Exports Due to Gasoline Price Increase and Shortage

To keep prices steady in the face of growing consumer and farmer demand and to facilitate refinery maintenance in the second-largest oil producer in the world, Russia banned gasoline exports on Tuesday and imposed a six-month embargo starting on March 1.

A representative for Deputy Prime Minister Alexander Novak, President Vladimir Putin's envoy for Russia's sizable energy industry, confirmed the embargo, which was initially reported by Russia's RBC.
According to RBC, which cited an unnamed source, Novak recommended the restriction in a letter dated February 21st, and Prime Minister Mikhail Mishustin accepted it.

According to Novak's proposal, which RBC cited, "It is necessary to take measures to help stabilize prices in the domestic market to offset excessive demand for petroleum products." Ahead of a presidential election scheduled for March 15–17, drivers and farmers in the largest wheat exporter in the world are concerned about domestic fuel costs, and several Russian refineries have recently been the target of Ukrainian drone strikes.

In an attempt to sabotage supply routes and logistics and weaken their rivals, Russia and Ukraine have aimed at one other's energy infrastructure to get the upper hand in a nearly two-year-old conflict that doesn't appear to be going away. By far Russia's largest exports are gas, oil, and oil products. These exports also provide a significant portion of the country's US$1.9 trillion GDP in foreign exchange earnings and guarantee Moscow's seat at the head of the world's energy affairs.

The Organization of the Petroleum Exporting Countries and other important partners are members of the larger OPEC+ organization, which also includes Saudi Arabia, the largest oil exporter in the world, and the Kremlin have been collaborating to maintain high prices.

In the first quarter, as part of OPEC+'s efforts to maintain prices, Russia has already voluntarily reduced its shipments of gasoline and oil by 500,000 barrels per day.  Gasoline output in Russia in 2023 was 43.9 million tons, of which 5.76 million tons, or almost 13% of total production, were exported. Most African nations Nigeria, Libya, Tunisia, and the United Arab Emirates are the largest importers of Russian gasoline.

Last month, in response to fires and drone strikes on its energy infrastructure, Russia cut back on its shipments of gasoline to nations outside the Commonwealth of Independent States to make up for unforeseen repairs at refineries. A unit at NORSI, the nation's fourth-largest refinery, which is situated close to Nizhny Novgorod, around 430 km (270 miles) east of Moscow, was shut down as a result of what is thought to have been a technical issue.

To combat high local prices and shortages, Russia prohibited the export of gasoline last year between September and November. This time, the restriction will not apply to Uzbekistan, Mongolia, members of the Eurasian Economic Union, or South Ossetia and Abkhazia, two separatist areas of Georgia backed by Russia.