The intense struggle of Russian authorities against the fuel crisis has been ongoing for several months. On April 2, 2026, in anticipation of the seasonal rise in fuel prices, the government introduced a complete ban on gasoline exports until the end of July, with the exception of supplies under intergovernmental agreements. The decision was explained by rising world prices for oil and petroleum products due to the conflict in the Persian Gulf. At that time, the increase in prices was temporarily stopped. By April 2, the price of AI-92 dropped by 4.8% from its peak of 68,504 rubles recorded on March 24 to 65,196 rubles, while the price of AI-95 decreased by 3.4% to 70,031 rubles, down from 77,483 rubles on March 24.
However, the effect of the export ban did not last long. Supply decreased due to drone attacks on refineries. By May, according to Rosstat, which does not provide absolute figures on production, the output of petroleum products fell by 13.5% month-on-month. Producer prices for AI-92 increased in May by 0.8% from April and by 13.2% compared to May 2025. The price of AI-95 rose by 0.8% month-on-month and by 12.7% year-on-year.
In retail, the weekly increase in prices per liter of AI-92 accelerated. From April 27 to May 4, it increased by 0.1%, rising from 63.53 rubles to 63.59 rubles; from May 26 to June 1, it increased to 0.4%, when its price rose from 63.89 rubles to 64.17 rubles. The price of AI-95 also grew: from 0.1% from late April to May 4 (from 68.99 rubles per liter to 69.01 rubles) to 0.5% from May 26 to June 1 (from 69.46 rubles per liter to 69.78 rubles).
During the week from June 16 to June 22, the price of AI-92 increased by 3.2%, from 65.41 rubles to 67.54 rubles, while AI-95 rose by 2.9%, from 71.11 to 73.2 rubles. Although from June 23 to June 29, the rate of increase slowed: retail prices for AI-92 rose by 1.7%, up to 68.76 rubles per liter, while AI-95 rose by 1.6%, reaching 74.38 rubles per liter.
The rise in prices was attributed to the shortage of gasoline and diesel that emerged in many Russian regions at the end of May. Lines formed at gas stations, and local authorities across the country began to limit fuel sales. On June 28, President Vladimir Putin publicly acknowledged the fuel shortage, calling it "non-critical."
Lower Quality Gasoline
On July 8, the government introduced a ban on diesel fuel exports, as reported by Deputy Prime Minister Alexander Novak at a meeting of Putin with government members regarding the fuel market situation. Novak noted that in July, Russia would begin importing petroleum products and that the government postponed several refinery repairs to later dates.
Earlier, on June 24, the State Duma adopted in its final reading a bill submitted by the government regarding amendments to the Tax Code. The resolution encompasses a comprehensive set of measures aimed at combating fuel shortages. On July 4, the law was signed by Vladimir Putin.
The bill allows producers to mix straight-run gasoline (naphtha) and other components to produce high-octane fuel. The resulting Euro-3 standard gasoline is equated to high-quality Euro-5, and those who produce it will be able to receive benefits on par with other suppliers, despite its sulfur content being 15 times higher than that of Euro-5—150 mg per kilogram of fuel.
On July 2, Prime Minister Mikhail Mishustin signed a resolution allowing refineries and oil depots to produce Euro-3 class gasoline and diesel fuel for the domestic market until the end of 2026.
Small refineries may benefit from the reduction in gasoline ecological standards, says Sergey Selin, Director of Market Analytics at the "Siala" agency. He explains that sulfur is removed from petroleum products at hydrocracking units available in large refineries, as significant volumes are needed to ensure their load: ranging from hundreds of thousands to over a million tons of gasoline per year. Such units are not present at small refineries in northern Russia or even larger ones in the south, built decades ago. These can only produce Euro-3. "It works perfectly for local equipment," says Selin.
Maxim Shevyrenkov, head of the raw materials market analysis center at the Institute of Energy and Finance (IEF), believes that lowering the ecological classification of gasoline combined with limiting fuel supplies at gas stations will be an effective measure to alleviate shortages, particularly in regions with relatively small fuel storage capacities. The negative environmental impact of using such fuel will be relatively inconspicuous, he asserts.
A relatively simple reconfiguration of production processes at refineries allows for more Euro-3 gasoline to be produced, notes Stanislav Mitrakhovich, an expert at the Financial University and the National Energy Security Fund. "This fuel is of not the best quality, not very beneficial for the environment and modern engines, but it essentially works," he states.
Most likely, a significant portion of Euro-3 will be sold in production areas— in northern regions and in Krasnodar Krai, says Selin from "Siala." He mentions that this will not concern substantial volumes, and during peak demand for this gasoline, other regions may face shortages, as he explains. The production of such fuel is not a panacea but merely a temporary solution to the supply crisis. Many engines currently in use were designed for Euro-3, so it is unlikely to cause them harm, adds the expert.
However, auto services are already seeing an increase in complaints. The number of inquiries in June increased by approximately 10-15%, reported Forbes co-owner of the VR Auto aggregator for technical centers, Mikhail Kozhanov. He indicated that all categories of drivers are affected, from owners of luxury brands to those with domestic and Chinese models. "Most modern cars are adapted to Euro-5 fuel, but in reality, Euro-4 or Euro-3 are increasingly being used, causing failures of engine components, filters, spark plugs, and injectors. There is a problem; [the number of inquiries] is increasing and will continue to grow; not all vehicles respond immediately. Malfunctions in fuel injection systems may become apparent after several refuels with low-quality gasoline," says Kozhanov.
Support for Refineries
The permission to produce Euro-3 may partially alleviate the supply issue and help small producers ramp up their output. Large enterprises have also not been overlooked. The terms for reconstruction agreements for refineries have been extended until December 31. This pertains to plants that signed modernization contracts with the Ministry of Energy before June 1, 2019, for no less than 60 billion rubles and were supposed to launch capacities by January 1, 2026, but were unable to meet the deadline.
Back in 2019, the Ministry of Energy signed several agreements with major oil companies, granting them the right to receive excise tax refunds on crude oil if one of two conditions was met: either the share of class 5 gasoline should not be less than 10% of the volume processed, or investments in modernization exceeded 60 billion rubles from July 1, 2014, to January 1, 2026. The new law raises the minimum investment threshold for modernization from 60 billion to 100 billion rubles.
Oil companies that signed modernization agreements with the Ministry of Energy receive a tax deduction on crude oil, known as "reverse excise tax," says Sergey Tereshkin, CEO of the Open Oil Market petroleum marketplace. Essentially, this is a subsidy, the size of which is calculated using a complex formula based on the volume of raw material processed. Since 2021, the investment surcharge of 30% of the reverse excise tax has been added to it, explains the expert. However, until now, only those companies that invested at least 60 billion rubles in new processing facilities could benefit from it. Now, the threshold has been raised to 100 billion rubles. It is possible that this amount will include funds for restoring technological facilities that were recently put into unscheduled repairs, notes Tereshkin.
Reverse excise tax, Tereshkin points out, is typically received by large refineries that are part of vertically integrated oil companies (VIOC) and have the resources needed to launch secondary oil processing units. In 2025, such refineries received 2.39 trillion rubles, of which nearly 1.3 trillion rubles were from the reverse excise tax and 170 billion rubles from the investment surcharge, according to Tereshkin.
Importers Not Forgotten
Another measure to overcome the shortages was the introduction of imports. On July 1, Reuters, which estimated summer gasoline demand in Russia at 110,000 tons per day, reported that at least 60,000 tons of gasoline had already been shipped from India to Russia. Kazakhstan has also reportedly agreed to supply 50,000 tons of gasoline to Russia in July and August. Additionally, Reuters reported that Moscow plans to import 400,000 tons of gasoline monthly from various countries, including Belarus, which, according to agency estimates, tripled its shipments to Russia in the first half of June compared to the same period in May, reaching 70,000 tons.
To stimulate imports, under the new law, for the first time, companies selling fuel produced abroad in Russia will receive dampening payments. The list of sellers will be determined by the government.
The dampening mechanism compensates for the price difference of fuel inside the country and outside it for producers and importers. If the export price of fuel is higher than the domestic price and exporting becomes more profitable than supplying to the domestic market, the state compensates producers for the difference; if negative, companies must pay into the budget. For importers, authorities compensate for the difference between external and internal market prices.
The dampening for producers is calculated based on the difference between the actual external and fixed internal prices. This year, the fixed internal threshold for AI-92 gasoline is set at 62,300 rubles per ton, while it is 58,950 rubles for diesel fuel. The same threshold will also apply to importers, with the difference that the actual prices in the EAEU will be used as an external indicator, explains Tereshkin from Open Oil Market.
For gasoline produced in other countries, the law states that the size of dampening payments will be determined by the Federal Antimonopoly Service (FAS) based on the indicative price of AI-92 gasoline in India and the cost of its delivery from there to Russia. According to Tereshkin, the price of gasoline in the Indian market will not likely be lower than the Russian one, considering that world prices have not yet returned to February 2026 levels. According to FAS data, the average export alternative price for AI-92 gasoline increased from 57,976 rubles per ton in February to 98,897 rubles per ton in May 2026. This indicator is based on European prices, warning Tereshkin; however, when calculated for Asian prices, the situation is unlikely to change significantly.
For fuel importers from the Eurasian Economic Union (EAEU)—which includes Belarus, Kazakhstan, Kyrgyzstan, and Armenia, in addition to Russia—the compensation factor for the volume of imported fuel is higher than for Russian fuel producers: 0.9 compared to 0.68. Furthermore, the payments will be retroactive, starting from June 1, 2026. From that date, the volume of imported gasoline from Belarus and Kazakhstan for calculation purposes will be multiplied by 0.9, meaning that the higher the import volume, the more significant the dampening payments will be, explains Tereshkin from Open Oil Market.
From Exchange to Gas Stations
Another measure introduced by the government was the reduction of the mandatory sales norm for gasoline producers in exchange trading from 15% to 10% of production volume. This norm will be in effect from July 1 to September 30, 2026.
The reduction of norms, according to Shevyrenkov from IEF, will allow major oil companies to utilize gasoline that was not sent to exchanges at their gas stations.
As VIOCs lack sufficient gasoline to supply their networks, the decision was made to sacrifice some independent gas stations that purchased fuel on the exchange, adds Selin.
Tereshkin from Open Oil Market considers the reduction of exchange sales norms an unfavorable solution. He believes it will make gasoline and diesel less accessible for independent gas stations, including in regions where there aren't enough major company gas stations.
The FAS has also become involved in addressing fuel issues, with its Moscow regional office reporting on July 6 that it has initiated cases of potential violations of antitrust legislation against six independent market participants who simultaneously raised gasoline and diesel prices at their gas station networks, while the Orenburg regional office initiated similar cases against three independent fuel market participants.
All Too Late
So far, the measures implemented have not yielded results. According to the latest data from Rosstat, from June 29 to July 6, the increase in gasoline prices accelerated. For AI-92, the price rose by 2% compared to the previous week, reaching 70.21 rubles per liter, while AI-95 saw a 2.3% increase to 76.19 rubles per liter, and diesel fuel increased by 3.4% to 87.76 rubles.
This time Rosstat did not specify which region experienced the highest price increases. Last week, it was Sevastopol, where gasoline prices rose by 30%. However, news of a sharp spike to 197 rubles per liter for AI-95 in the city was reported to Putin by Sevastopol's Governor Mikhail Razvozhayev on July 8.
Actions to stimulate fuel imports should have been taken a couple of months earlier when the risk of unplanned technological downtimes at refineries was already evident, suggests Tereshkin from Open Oil Market. This could have avoided the formation of queues at gas stations, he believes.
Considering the current market situation, it may now be a good time to switch to free pricing on the St. Petersburg exchange and at gas stations while abandoning the dampening system, says Selin from "Siala." This would encourage commercial fuel imports and quickly address shortage issues in the domestic market, he believes.
On the other hand, Shevyrenkov from IEF believes that enforcing limitations on all gas stations in the country would be the best way to combat the surge in fuel demand.
Source:
Forbes
