Price Hikes and Local Shortages: Farmers Complain About Fuel Issues Amid Sowing Season

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Price Hikes and Local Shortages: Farmers Complain About Fuel Issues
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Farmers have started complaining about rising prices and even shortages of fuel at the height of the sowing season. However, experts interviewed by "RG" believe that this is not yet a systemic fuel deficit, but rather a combination of seasonal demand, logistical constraints, and the consequences of reduced refining capacity.
According to the "People's Farmer" association, fuel for agricultural producers has risen in price by approximately 35% over the past two months. Stanislav Sankeiev, Executive Director of the association, told "Rossiyskaya Gazeta" that a difficult fuel situation is currently observed across the entire country.

"For instance, in the Volga and Central Federal Districts, our colleagues report that prices start at 87 rubles per liter, and immediate availability of diesel is not possible — waiting times range up to four days," he says.

Specifically, in Mari El, diesel is currently sold from 88 rubles per liter, in the Ulyanovsk and Samara regions — 89 rubles per liter, and in the Belgorod and Bryansk regions — around 90 rubles per liter.

For enterprises operating under high credit burdens and rising production costs, even such a price increase becomes a sensitive factor.

Over the past two months, fuel for agricultural producers has risen in price by about a third. Moreover, immediate access to diesel is not always possible.

Small farms are particularly affected by the price hike. Large agricultural holdings often have the ability to enter into long-term contracts, build up fuel reserves in advance, or benefit from more favorable purchasing terms. For farmers and medium-sized agricultural enterprises, the scope for maneuvering is significantly limited.

At the same time, the impact of rising fuel prices is not limited to additional costs for fieldwork. Diesel remains one of the key components of transportation costs, so price increases also affect the logistics of agricultural products. The higher the costs of transporting raw materials and finished goods, the greater the pressure on the entire production chain.

However, industry representatives are not yet inclined to dramatize the situation. Alexey Krasilnikov, Executive Director of the Potato Union, acknowledges the existence of fuel supply problems in certain regions but considers them solvable. If difficulties arise in one region, fuel is promptly delivered from neighboring ones. According to Krasilnikov, transportation costs account for only about 5% of the cost structure, so even a noticeable increase in fuel prices does not necessarily lead to a significant rise in the prices of vegetables and potatoes on store shelves. The current situation has a much more serious impact on producers themselves.

Looking at exchange pricing, in the European part of Russia, quotations for diesel fuel (DF) — the main type of fuel used for agricultural work — have increased by 19% since the beginning of March, and by 17% in over-the-counter transactions. However, this is an average figure; the European part of Russia is large, and agricultural enterprises, especially small and medium-sized ones, typically purchase fuel from local oil depots rather than from large traders.

As noted by Yuri Stankevich, Deputy Chairman of the State Duma Committee on Energy, in a conversation with "RG", the wholesale price increase may be higher than the dynamics of exchange indices. Not all fuel volumes are sold through the exchange — a significant portion is sold via over-the-counter contracts, and the price for the end-user farmer includes logistics, storage, and the credit burden of traders. With expectations of further price increases and reduced fuel supply, market participants may incorporate a "risk premium."

Spring fieldwork traditionally creates a peak in diesel consumption. However, overall, there is no fuel deficit in the country, experts are confident.

The issue of price increases in the small wholesale segment, which is not captured in the statistics of the St. Petersburg Exchange, was already raised by the industry community during the gasoline price hike last autumn. Moreover, a concerning fact is that compared to May of last year, sales volumes of diesel fuel on the exchange have significantly declined — by 80% (from 1.1 million to 0.61 million tons). This is despite the fact that in May of this year, there was one more day of fuel trading on the exchange.

According to Stankevich, the increase in wholesale fuel prices for agricultural producers and local shortages result from a combination of several factors. Primarily, seasonal demand and logistics play a role. Spring fieldwork traditionally creates a peak in diesel consumption. In southern regions, the infrastructure load is higher than the national average: demand is concentrated in a short period, while logistical capabilities (railways, oil depots, truck fleets) are limited. Even with sufficient overall production, local "bottlenecks" arise, leading to temporary shortages. Today, the situation is exacerbated by continuous attacks on oil refineries and storage infrastructure (oil depots and fuel storage facilities).

According to Rosstat, in April of this year, the production of coke and petroleum products in the country decreased by 9.2% compared to last year, and by 11.3% compared to March. Statistics on output volumes by fuel type are unavailable, and aggregate data for May have not yet been published. Energy expert Kirill Rodionov believes that the April decline is a continuation of the trend from the first quarter of 2026, when the volume of primary oil refining in the country decreased by 1.6% year-on-year (to 64.1 million tons), while gasoline and diesel output fell by 4.8% (to 10.8 million tons) and 0.6% (to 21.4 million tons), respectively.

Nevertheless, overall, there is no fuel deficit in the country, experts are confident. The issue is about supply disruptions in some regions. As Sergey Frolov, Managing Partner of NEFT Research, points out, local shortages and price increases are linked to a physical fuel deficit in southern regions caused by attacks on refineries, as well as disrupted logistics. It is possible to purchase the required volume of fuel, but the problem lies in transporting it to its destination intact.

Sergey Tereshkin, CEO of Open Oil Market, holds a similar view: unscheduled repairs at refineries have led to market panic. Once the situation with refinery utilization becomes clearer, prices are likely to decline.

However, it is certainly not worth blaming everything on the difficult fuel market situation. According to Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and a member of the expert council of the "Gas Stations of Russia" competition, it is surprising that agricultural producers continue to complain about rising fuel prices every spring. The dynamics of fuel prices throughout the year are well known, especially to those whose business success depends on it. Fuel could be purchased in advance, when prices are not breaking records. Risks could be hedged — for example, by arranging with a specialized agricultural bank to finance fuel procurement during the low season, in winter.

One could argue that only large agricultural enterprises are capable of purchasing fuel in advance. Medium-sized companies and small farmers are unlikely to have the technical and financial capabilities to stockpile in advance. As for loans, even on preferential terms for large companies, a loan for fuel purchase would be a serious financial burden. On the other hand, after almost 40 years of private sector operation in the agricultural industry, its participants could have learned to prepare for the annual spring increase in diesel prices.

The Ministry of Energy declined to comment on "RG"'s request. The Ministry of Agriculture did not provide comments at the time of publication.

Source: RG.RU

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