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Trade Trends News
28-02-2024
-Russia bans gasoline exports from March 1
-Prime Minister Mishchenko Mishchenko has approved the ban.
-Gasoline prices sensitive ahead of elections
Russia on Tuesday ordered a six-month ban on gasoline exports from March 1 to keep prices stable amid growing demand from consumers and farmers and to allow maintenance of refineries in the world's second-largest oil exporter.
The ban was first reported by RBC and confirmed by a spokesman for Alexander Novak, the deputy prime minister in charge of Russia's vast energy sector under President Vladimir Putin.
Royal Bank of Canada, citing unnamed sources, said Prime Minister Mikhail Mishustin approved the ban after Novak proposed it in a Feb. 21 letter. A second source told Reuters that the decision had been made but the decree had not yet been issued.
Citing Novak's proposal, Royal Bank of Canada said, "In order to offset the excessive demand for petroleum products, it is necessary to take measures to help stabilize prices on the domestic market."
Domestic gasoline prices are sensitive for motorists and farmers in the world's largest wheat exporter ahead of the March 15-17 presidential election, and some Russian refineries have been hit by Ukrainian drone strikes in recent months.
Both Russia and Ukraine have targeted each other's energy infrastructure in an attempt to disrupt supply lines and logistics and demoralize their rivals as both countries seek an advantage in a conflict that has lasted nearly two years and shows no sign of ending.
Exports of oil, petroleum products and natural gas are by far Russia's largest exports, a major source of foreign exchange earnings for the country's $1.9 trillion economy, and ensure Moscow's place in global energy politics.
The Kremlin has been working with Saudi Arabia, the world's largest oil exporter, to maintain high oil prices as part of the broader OPEC+ organization that includes the Organization of Petroleum Exporting Countries and key allies.
Russia has voluntarily cut oil and fuel exports by 500,000 barrels per day (bpd) in the first quarter as part of OPEC+ efforts to shore up prices.
Russia's largest gasoline producers in 2023 are Gazprom Neft (SIBN.MM), opens new tab Lukoil's Omsk refinery (LKOH.MM), opens new tab Nizhny Novgorod NORSI refinery and Rosneft (ROSN.MM), opens new tab Ryazan refinery.
In 2023, Russia produced 43.9 million tons of gasoline and exported about 5.76 million tons, or about 13% of its production. The biggest importers of Russian gasoline are mainly African countries, including Nigeria, Libya, Tunisia and the United Arab Emirates.
Russia reduced gasoline exports to non-CIS countries last month to compensate for unplanned repairs at refineries due to fires and drone strikes on its energy infrastructure.
The outages included the stoppage of a unit at Russia's fourth-largest refinery, NORSI, near the city of Nizhny Novgorod, about 430 kilometers (270 miles) east of Moscow, in what is believed to have been a technical accident.
Last year, Russia banned gasoline exports between September and November to address high domestic prices and shortages.
This time, the ban will not be extended to Eurasian Economic Union members, Mongolia, Uzbekistan and the two Russian-backed breakaway regions of Georgia - South Ossetia and Abkhazia.
Wholesale fuel prices in Russia have risen since the beginning of the year. Since Jan. 1, 92 gasoline has risen 22 percent, while 95 has risen 32 percent, according to Feb. 26 prices on the St. Petersburg International Commodity Exchange (SPIMEX). 92 has fallen 3.3% since the export ban was announced.
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