MOSCOW: The Russian government said on Friday it has lifted a ban on pipeline exports of diesel through ports, lifting most of the restrictions imposed on September 21.
Gasoline export restrictions are still in place.
Diesel is Russia’s largest oil product export, with about 35 million tons last year, almost three-quarters of which were shipped via pipelines. Russia also exported 4.8 million tons of gasoline in 2022.
Global oil prices reversed early gains after the news. As of 0730 GMT, Brent futures were down 0.08% at $84.01 a barrel and on course for their steepest weekly decline since March.
“The government has lifted restrictions on the export of diesel fuel supplied through pipelines to seaports, provided that the manufacturer supplies at least 50% of the diesel fuel produced to the domestic market,” the government said in a statement.
The restrictions on export of fuels from Russia, the world’s largest seaborne fuel exporter, just ahead of the U.S., have pushed up global prices and forced some buyers to look for alternative sources of gasoline and diesel.
After the European Union banned imports of Russian fuels over Moscow’s actions in Ukraine, Russia shifted European exports of diesel and other fuels to Brazil, Turkey, several North and West African countries, and the Gulf states in the Middle East .
Gulf states, which have their own major refineries, are re-exporting the fuel.
Russia has addressed both deficits and high deficits fuel prices in recent months, which has especially hurt farmers during the harvest season.
“The decision of the authorities will help solve both problems, but will not completely solve them,” the Moscow-based BCS brokerage wrote in a morning note.
“We continue to expect tax changes to be introduced soon that will remove most or all arbitrage opportunities for independent traders to increase export profitability.”
Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while petrol prices have fallen by 10%.
That has not yet translated into the same magnitude of decline in retail prices, although Russian Deputy Prime Minister Alexander Novak, President Vladimir Putin’s top man on oil trading, has said the ban is starting to yield positive results .
The Federal Anti-Monopoly Service (FAS) said on Thursday it had sent instructions to oil companies ordering them to reduce the prices of oil products.
The government on Friday also increased the export tax on fuel for resellers, who do not produce the fuel, from 20,000 rubles to 50,000 rubles ($495.63) per tonne, and fully reintroduced subsidies, or damper payments, for oil refineries from October 1.
“The government is suppressing attempts by resellers to pre-purchase fuel for subsequent exports once current restrictions are lifted. This also prevents them from exporting fuel under the guise of other products,” the report said.
Gasoline export restrictions are still in place.
Diesel is Russia’s largest oil product export, with about 35 million tons last year, almost three-quarters of which were shipped via pipelines. Russia also exported 4.8 million tons of gasoline in 2022.
Global oil prices reversed early gains after the news. As of 0730 GMT, Brent futures were down 0.08% at $84.01 a barrel and on course for their steepest weekly decline since March.
“The government has lifted restrictions on the export of diesel fuel supplied through pipelines to seaports, provided that the manufacturer supplies at least 50% of the diesel fuel produced to the domestic market,” the government said in a statement.
The restrictions on export of fuels from Russia, the world’s largest seaborne fuel exporter, just ahead of the U.S., have pushed up global prices and forced some buyers to look for alternative sources of gasoline and diesel.
After the European Union banned imports of Russian fuels over Moscow’s actions in Ukraine, Russia shifted European exports of diesel and other fuels to Brazil, Turkey, several North and West African countries, and the Gulf states in the Middle East .
Gulf states, which have their own major refineries, are re-exporting the fuel.
Russia has addressed both deficits and high deficits fuel prices in recent months, which has especially hurt farmers during the harvest season.
“The decision of the authorities will help solve both problems, but will not completely solve them,” the Moscow-based BCS brokerage wrote in a morning note.
“We continue to expect tax changes to be introduced soon that will remove most or all arbitrage opportunities for independent traders to increase export profitability.”
Since the ban was introduced, wholesale diesel prices on the local exchange have fallen by 21%, while petrol prices have fallen by 10%.
That has not yet translated into the same magnitude of decline in retail prices, although Russian Deputy Prime Minister Alexander Novak, President Vladimir Putin’s top man on oil trading, has said the ban is starting to yield positive results .
The Federal Anti-Monopoly Service (FAS) said on Thursday it had sent instructions to oil companies ordering them to reduce the prices of oil products.
The government on Friday also increased the export tax on fuel for resellers, who do not produce the fuel, from 20,000 rubles to 50,000 rubles ($495.63) per tonne, and fully reintroduced subsidies, or damper payments, for oil refineries from October 1.
“The government is suppressing attempts by resellers to pre-purchase fuel for subsequent exports once current restrictions are lifted. This also prevents them from exporting fuel under the guise of other products,” the report said.
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