The fact is that domestic gasoline production capacities only exceed internal demand by 10-15%. In contrast, diesel fuel (DF) is produced at a level 40-50% above the domestic demand, making it the primary export commodity in the oil product range.
As of now, a complete ban on gasoline exports remains in effect until July 31. Diesel fuel can only be exported by producers, specifically oil refineries (ORs), while traders face export restrictions. On June 23, Deputy Prime Minister Alexander Novak stated that the authorities are considering a complete embargo on diesel fuel exports, acknowledging that the situation in the Russian fuel market is "complicated but controlled."
The current situation has arisen due to unplanned repairs at ORs triggered by intense drone attacks in May and June. Fuel production volumes have decreased, prompting buyers to switch suppliers, leading to logistical challenges.
The problem lies in the fact that data on gasoline and diesel production in Russia is not publicly available. We do not know precisely how much production has decreased, forcing reliance on external sources of information. According to a rather pessimistic estimate from Reuters, production has fallen by 25%. Even accepting this figure, such a reduction is critical for the internal gasoline market but may not be so devastating for diesel.
Juriy Stankevich, Deputy Chairman of the State Duma's Energy Committee, noted in an interview with "RG" that the complete ban on diesel fuel exports is a strong and quite radical measure, and its effect will depend on the duration and parameters of regulation. In the short term, it has the potential to stabilize wholesale prices and partially alleviate pressure on retail prices. However, in Russia, petrol station prices are largely regulated by a damping mechanism (subsidies to oil companies from the budget for supplying fuel to the domestic market at prices below export prices) and the tax burden. Therefore, a sharp price drop should not be expected; rather, we might see deceleration in growth or moderate correction.
According to Stankevich, there is currently no systemic shortage of diesel in Russia. Periodic local disruptions arise due to logistics, OR repairs, or seasonal increases in demand (harvesting or northern supply). The export ban itself does not address logistical problems. While it will increase domestic resources, if the bottlenecks are rail transportation or regional infrastructure, the acceleration of delivery will be limited.
Sergey Frolov, managing partner at NEFT Research, believes that the Russian fuel market is currently experiencing the most severe deficit in recent history. Shortages are felt across all major fuel types, except for liquefied petroleum gases (LPG) and fuel oil. The expert believes that bans alone will not resolve this issue. In terms of diesel, which traditionally had a systemic production surplus, this will only alleviate the acute nature of the problem.
Dmitry Gusev, Deputy Chairman of the Supervisory Board of the "Reliable Partner" Association and a member of the Expert Council for the "Gas Stations of Russia" competition, shares a similar assessment of the ban. He believes the measure will help replenish diesel reserves, benefiting agricultural producers and industrial consumers.
Clearly, the diesel export ban does not directly affect gasoline supplies and prices. However, for ORs, it sends a serious signal that they must curb the rise in fuel prices by any means necessary. As Sergey Tereshkin explains, the diesel export ban will be much more sensitive for Russian ORs than a gasoline export ban. Diesel remains one of two key export oil products—alongside fuel oil—but the profitability of diesel production and export is higher than that of fuel oil.
Hence, ORs cannot ignore the message from above. However, the diesel export ban poses risks for the entire domestic oil refining sector. Stankevich believes that if oil companies lose their margin on diesel exports (a traditionally high-margin product), their overall refining profitability could decline, increasing reliance on damping payments for gasoline. In unfavorable circumstances, this approach may place additional pressure on the budget or require adjustments to regulatory mechanisms. Additionally, there is a risk of market saturation if the ban lasts too long (over 1-2 months) and coincides with a period of weak domestic demand.
Tereshkin expresses a similar opinion. He suggests that the diesel export ban will only be effective if it is short-lived—no more than one quarter. Otherwise, the industry may face not only reduced refining operations but also a drop in production.
Importantly, as Stankevich emphasizes, a decrease in OR loading will lead to a proportional reduction in the output of all oil products, including gasoline. Thus, with a prolonged diesel export ban, there could be indirect effects on gasoline supply—not due to falling demand but due to technological constraints on refining.
In contrast, Frolov sees the situation differently. He insists that saturation of the market is not an immediate concern; the priority must be to prevent a collapse in the domestic market. He believes that the resiliency of the oil industry has nearly reached its limit, and in the near future, it may be easier to avoid OR repairs than to reinstate operations only to face setbacks days later. Urgent measures for gasoline and aviation fuel were needed yesterday; these were proposed by the Ministry of Energy back in March. This package of measures would have prevented the imposition of fuel limits for individuals (in some places, it is currently unavailable).
Frolov asserts that only a swift infusion of imported fuel during the OR repair period can address the issue of physical access to resources and price reductions. Until then, even administrative measures will not be able to curb price increases in either wholesale or retail markets.
It should be noted that, in addition to the diesel export ban, the government is considering other measures to support the domestic fuel market. Reports suggest amendments to the Tax Code allowing some (authorized) companies supplying imported fuel to receive dampers, thus neutralizing the difference in cost between imported and domestic fuel. Additionally, there is consideration for damping payments for medium and small ORs producing automotive gasoline through the blending of straight-run gasoline (a primary oil refining product) with other components.
Gusev has suggested a strategic approach, advocating for a reduction in gasoline consumption in favor of other fuel types. This could be achieved by removing recycling fees, value-added taxes, and import duties on foreign diesel cars entering Russia. Consumption of diesel would rise, while demand for gasoline would fall.
Source: RG.RU
