- Web Desk
- 4 Hours ago
Russia’s Putin orders government to stabilise retail fuel prices
- Web Desk
- Sep 27, 2023
MOSCOW, (Reuters): Russian President Vladimir Putin on Wednesday ordered his government to make sure retail fuel prices stabilise and urged additional measures to balance the domestic market following the introduction of a ban on gasoline and diesel exports.
Putin told the cabinet it needed to act swiftly and that reviewing oil industry taxes was an option.
The government on Thursday introduced a temporary ban on exports of gasoline and diesel to all countries beyond four ex-Soviet states to try to stem an increase in domestic fuel prices.
The impact on refined product supplies bolstered global oil prices, which rose to their highest since last November.
Russian domestic fuel prices initially eased on the local commodity exchange but began to creep up again after an easing of the restrictions was announced over the weekend.
“The measures have been taken, but the prices are rising… The consumer needs a result,” Putin said. “I’d ask you to react to events more promptly.”
The Kremlin has said the export ban will remain in place for as long as needed to stabilise the domestic market.
Analysts have predicted the restrictions will last for a few weeks during harvesting, which increases fuel demand.
Deputy Prime Minister Alexander Novak told Putin the government has been considering additional measures.
He said that there are proposals to restrict “grey” fuel exports, or the purchase of oil products initially meant for domestic use and exported instead for a higher price, and to raise fuel export duty to 50,000 roubles ($518.24) per tonne from 20,000 roubles for resellers, or completely ban them from exports.
The government is also reconsidering a cut to damper payments, or subsidies to oil refineries, which began this month, he said.
Russia has suffered shortages of gasoline and diesel in recent months. Wholesale fuel prices spiked, although retail prices are capped to try and keep them in line with the official rate of inflation.
Traders said the fuel market in Russia, one of the world’s biggest oil producers, has been hit by factors including maintenance at oil refineries, bottlenecks on railways and the weakness of the rouble, which incentivises fuel exports.
The shortage has been especially painful in some parts of Russia’s southern agricultural region and if it worsens, it could could be awkward for the Kremlin as a presidential election looms in March.