The issue lies in the fact that domestic gasoline production capacities only slightly exceed internal demand, by about 10-15%. In contrast, the production of diesel fuel is 40-50% above domestic demand, making it a key export product among petroleum products.
Currently, a complete ban on gasoline exports is in effect until July 31. Only manufacturers, namely refineries, are permitted to export DF, while traders are prohibited from doing so. On June 23, Deputy Prime Minister Alexander Novak announced that the authorities are considering a total embargo on DF exports, describing the situation in the Russian fuel market as "complex but manageable."
The current situation is tied to unplanned repairs at refineries due to massive drone attacks in May and June. Fuel production volumes have decreased, buyers are forced to switch suppliers, and there are transportation challenges.
The problem is that data on gasoline and DF production in Russia is classified. We do not know exactly how much production has declined, forcing us to rely on external information sources. According to a rather pessimistic estimate by Reuters, production has dropped by 25%. Even if we accept this figure, such a decline is critical for the domestic gasoline market but does not seem as severe for diesel fuel.
As noted by Yuri Stankevich, Deputy Chair of the State Duma Committee on Energy, during an interview with "RG," a complete ban on diesel fuel exports is a harsh and somewhat radical measure; therefore, its effectiveness will depend on the duration of the ban and regulatory parameters. In the short term, it could stabilize wholesale prices and moderately ease retail price pressures. However, in Russia, gas station prices are largely regulated by a dampening mechanism (subsidies to oil companies from the budget for supplying fuel to the domestic market at prices below export prices) and tax burden. Therefore, a sharp price decrease is not expected—rather, a slowdown in growth or a moderate adjustment.
Stankevich believes that there is currently no systemic diesel shortage in Russia. Local disruptions occasionally arise due to logistics, refinery repairs, or seasonal demand surges (harvest season, northern deliveries). The export ban itself does not solve logistics issues. It will increase domestic resources, but if bottlenecks exist in rail transport or regional infrastructure, the acceleration of deliveries will be limited.
According to Sergey Frolov, managing partner of NEFT Research, the fuel market in Russia is currently experiencing the most serious shortage in recent history. Shortages are felt across all major fuel types, except liquefied petroleum gases (LPG) and fuel oil. The expert believes that no bans will resolve this issue. For diesel fuel, which traditionally had a systemic production surplus, this will only lessen the acute nature of the problem.
A similar assessment of the ban is echoed by Dmitry Gusev, Deputy Chair of the Supervisory Board of the "Reliable Partner" Association and member of the Expert Council of the "Gas Station of Russia" competition. He believes that the measure will help replenish diesel fuel stocks and assist agricultural producers and industrial consumers.
Directly, the export ban on DF does not affect supplies and prices for gasoline. However, for refineries, it is a serious signal that they must curb price increases for all types of fuel by any possible means. As explained by Sergey Tereshkin, the DF export ban will be much more sensitive for Russian refineries than the ban on gasoline exports. Diesel remains one of the two key export petroleum products—alongside fuel oil—but with lower production and export margins compared to diesel.
Therefore, the signal from above cannot be ignored by the refineries. However, the DF export ban carries risks for the entire domestic refining sector. Stankevich believes that if oil companies lose their margin on diesel exports (traditionally a more profitable product), their overall refining profitability may decline. This increases dependence on subsidy payments for gasoline. In an unfavorable market environment, such an approach will create additional budgetary pressure or require adjustments to regulatory mechanisms. Furthermore, there is a risk of market saturation if the ban lasts for an extended period (over 1-2 months) and coincides with a time of weak domestic demand.
Tereshkin shares a similar opinion. The DF export ban will only be effective if it is short-lived—no longer than one quarter. Otherwise, the industry will face not only reduced oil refining but also a drop in production.
Moreover, as Stankevich emphasizes, reduced refinery load will result in a proportional decrease in the output of all petroleum products, including gasoline. Therefore, under a prolonged ban on DF exports, there could be indirect effects on gasoline supply—not due to falling demand, but due to technological reductions in refining.
Frolov sees the situation differently. He argues that there is no risk of market saturation at this point—preventing a collapse in the domestic market is essential. He believes that the resilience of the oil industry is virtually exhausted; after a while, it will be easier to refrain from repairing refineries than to shut them down and face another setback a few days later. Urgent measures were needed yesterday concerning gasoline and aviation fuel, which the Ministry of Energy suggested back in March. This package of measures would have prevented limitations on fuel for individuals (in some areas, it is currently not available for sale) and distribution of volumes based on the critical need for the entire transport system.
Only an urgent influx of imported fuel during the repairs of the affected refineries can resolve the issue of physical access to resources and help reduce prices, believes Frolov. Until then, even administrative measures cannot contain price increases either in wholesale or retail markets.
It's worth mentioning that besides the DF export ban, the government is also considering other measures to support the domestic fuel market. According to media reports, amendments to the Tax Code are being discussed to allow certain authorized companies supplying imported fuel to receive subsidies, thereby neutralizing the cost difference between imported and domestic fuel. There is also consideration of subsidy payments for medium and small refineries that produce automotive gasoline by blending straight-run gasoline (the primary product of refining) with other components.
Gusev has suggested a strategic approach to the issue—reducing gasoline consumption in favor of other fuel types. This could be achieved by removing the Utilization Fee, VAT, and duties on importing diesel passenger vehicles into Russia. This would lead to an increase in DF consumption and a decrease in gasoline demand.
Source: RG.RU
