October 6, 2023[Reuters]- Russia is setting no time frame for the fuel export ban it introduced last month, and it will remain in place as long as necessary to stabilise prices and address shortages on the domestic market, Interfax cited Deputy Prime Minister Alexander Novak as saying.
Another news agency, TASS, cited Novak as saying that the government plans to prevent the prices of fuel at the pump from rising above general consumer price inflation in 2023 and 2024.
Despite being one of the world’s top oil producers, Russia has suffered shortages of gasoline and diesel in recent months as high export prices made it more advantageous for refiners to sell their products abroad.
Traders also cited distortions between wholesale and retail prices, as well as infrastructure bottlenecks such as congested railways, as factors behind the fuel crisis.
To address the issue, Russia introduced the gasoline and diesel export ban on Sept. 21, while easing it a few days later by allowing cross-border supplies of some fuel, such as marine fuel and high-sulphur gasoil.
The ban has impacted world markets, particularly for diesel, of which Russia was the world’s top seaborne exporter until the measure was introduced. Under Western sanctions, Russia has diverted diesel exports to Brazil, Turkey and a number of African and Gulf states since the start of the Ukraine conflict.
Expectations for the length of the fuel ban vary. JP Morgan said it could last a couple of weeks until harvest season concludes in October, while FGE Energy said replenishing Russia’s gasoline stocks could take up to two months.
“Our key goal is to ensure that prices at gas stations rise throughout the year at a level no higher than inflation. This was observed in previous years, and this year the same task is also set, and for future years,” Novak said, according to Russian news agencies.
Russia’s gasoline and diesel prices continued to slide on the local exchange. Since the ban was introduced, gasoline prices have declined by almost 10%, while diesel prices plummeted by 23%.
According to the state statistics service Rosstat, as of Sept. 25, retail gasoline prices in Russia had increased by 9.9% from the end of 2022, while the price of diesel rose by 11.3%.
Russia’s annual inflation is currently running at 5.74%.
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