Russia to Suspend Gasoline Exports From March

Russia will suspend gasoline exports for six months beginning in March to ensure supply for the domestic market in peak demand season.

The information comes from an unnamed source close to the government who spoke to business daily RBC. The report recalls Deputy Prime Minister Alexander Novak calling for a temporary suspension of gasoline exports with a letter to the prime minister earlier this month.

This would be the second gasoline export ban Russia has enacted in less than six months. Last September, the government also suspended gasoline sales abroad due to a tight supply situation at home as many refineries entered an extended maintenance season.

The ban was lifted in mid-November, with the government reporting a supply surplus of 2 metric tons at the time. Now, with agricultural activity picking up as the weather warms up, demand for fuels at home will increase once again and there is another maintenance season coming for refineries, which will tighten supply, Novak said in is February 21 letter.

To ensure adequate supply and prices for diesel—the fuel used in farming—Novak also proposed increasing the amount of this fuel made available for sale at the local commodity exchange. There are no plans to ban diesel exports.

When Russia last year suspended exports, the suspension also included diesel, sparking fears of supply deficit in key markets, notably Europe and the United States. The global supply of diesel has been tight for a couple of years now and only weak economic growth in developed nations has prevented the situation from devolving into a full-blown shortage, according to analysts.

That fear was recently resurrected by signs that the U.S. economy is beginning to pick up speed, prompting a forecast by Reuters’ John Kemp that the diesel shortage is back on the horizon as distillate stocks in the country remain below seasonal averages.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:

• Sasol Earnings Slump on Weaker Oil and Petrochemical Prices
• Israeli Gas Exports to Neighbors Soar Despite Gaza Conflict
• Armed Group Shuts Down Libya’s Zawiya Refinery