Russia’s government is to consider imposing quotas on fuel exports to boost supply and quell an alarming surge the price of gasoline.
Deputy Prime Minister Alexander Novak instructed the oil companies “to respect the priority of gasoline supplies to the domestic market, even in a situation where export seems more profitable” and not to extract “momentary benefits to the detriment” of consumers, according to a government statement.
At the Friday meeting with officials and producers, Novak supported a proposal to increase the minimum level of gasoline sales on the Spimex commodity exchange to 13% of production, and also ordered a study of export quotas for oil products.
Growth in wholesale gasoline prices accelerated 19% month-on-month in May. They jumped 9.7% in April and 36% in March, according to Federal Statistics Service. The energy ministry recommended oil producers to raise domestic supplies and said it may consider limiting flows abroad if the market situation requires.
Russia is considering halving subsidies to nation’s refineries as the Kremlin seeks to limit budget spendings amid its war in Ukraine. That could lower the attractiveness for the plants to sell into the domestic market.
The subsidies were introduced in 2019 to ease the effects of global price volatility and to keep fuel flowing to the domestic market. In the first five month of the year, payments reached 464 billion rubles ($5.2 billion).
The mooted changes could have negative impact on refining efficiency as margins could turn negative and affect how much crude the plants process, Alexander Dyukov, chief executive officer at Gazprom Neft, said earlier this month.
Gasoline represents a relatively small portion of Russia’s overall fuel exports.
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