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Russia Lifts Ban on Diesel Export

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CEM REPORT, ENERGY | Russia has lifted the ban placed on pipeline diesel exports via ports under the provision that companies sell at least 50% of their diesel production to the domestic market.

The Russian government also on Friday hiked fuel export duty for resellers not producing fuel to 50,000 roubles ($495.63) per tonne from 20,000 roubles. The restrictions for gasoline exports are still in place.

“The government lifted restrictions on exports of diesel fuel delivered to seaports by pipeline, provided that the manufacturer supplies at least 50% of the produced diesel fuel to the domestic market,” the government said in a statement.


The government said the hike in export duty is to quell attempts by resellers to purchase fuel in advance for subsequent export once the current restrictions are lifted. This also prevents them from exporting fuel under the guise of other products

Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while gasoline prices are down 10%. The restriction has also forced international buyers to seek alternative sources of gasoline and diesel.

Global oil prices reversed early gains to decline after the news. As of 0730 GMT, Brent futures nudged down by 0.08% to $84.01 per barrel and were on track for their steepest weekly decline since March, according to Reuters.

Recall that CEM reported that Russia has been battling shortages and high fuel prices in recent months as high export prices made it advantageous for refiners to sell their products abroad. Fuel oil is in high demand for the Arctic and other regions, which are facing a severe winter.

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According to a document published on the Kremlin website, Russia on Sept. 21 introduced a ban on fuel exports to fight high gasoline and diesel prices as well as fuel shortages, especially during harvesting season.

The government said on Thursday there was no deadline for lifting the ban and the restrictions would be in place for as long as needed adding that other measures to ensure the stability of the fuel market would be considered once the ban was lifted.

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