Russia considers fuel export quotas to tackle high prices

Russia may introduce quotas on overseas fuel exports if a complete export ban imposed last week does not succeed in bringing down persistently high gasoline and diesel prices, its Deputy Prime Minister Alexander Novak said.

The government said in a statement late on Thursday that Novak told a meeting of senior managers at Russian oil companies that the ban on the export of gasoline and diesel had initially led to a fall in prices on the commodity exchange.

The Kremlin and Russia's energy ministry have said the current fuel export ban, announced on Sept 21, will remain in place until the domestic fuel market stabilises. Analysts expect it to last until the Russian harvest, and peak fuel demand, is over in a few weeks.

Any fuel export quotas are likely to be put in place after the lifting of the export ban and would be similar to Russian restrictions on cross-border fertiliser sales.

The idea of fuel market regulations similar to those for fertilisers was first put forward by President Vladimir Putin at a governmental meeting on Wednesday.

Moscow introduced temporary quotas on some of its fertiliser exports in late 2021 to ensure sufficient domestic supplies, but has extended them continuously since.

Although Russian domestic fuel prices initially eased on the local commodity exchange after the export ban, they crept up after an easing was announced over the weekend.

"As a result of the ban on the export of gasoline and diesel fuel, we saw a decrease in prices on the exchange. We expect a reduction in these prices to be transmitted to the small wholesale and retail segments, as well as to agricultural producers," Novak was quoted as saying.

"Price increases are unacceptable. If the situation does not change, strict regulatory measures will be taken, comparable to those in force on the fertiliser market," he added.

Novak also told the meeting with oil producers to take urgent measures to reduce fuel prices at filling stations of oil producers and the independent companies.

"Retail price reductions should happen soon," he said.