Russia to raise fuel export duties due to domestic shortage

[News_Editor]

Russia to raise fuel export duties due to domestic shortage

2011-04-29 00:52:27 GMT+7 (ICT)

MOSCOW (BNO NEWS) -- Russian Prime Minister Vladimir Putin on Thursday ordered to raise export duties on oil products in order to address the domestic gasoline shortages, RIA Novosti reported.

Putin directed Deputy Energy Minister Sergei Kudryashov to prepare raise proposals to be presented at the end of the day as several Russian regions have been severely affected by shortages of gasoline since last weekend.

The introduction of the Euro-3 fuel standard will be postponed as it was scheduled to be introduced this year, in coordination with Belarus and Kazakhstan. PM Putin said that the deadline will be rearranged but Russia will honor its agreements with its two partners.

Minister Kudryashov added that Russia will suspend all exports of gasoline in May in order to meet the domestic demand in some regions of the world's top oil producer. In addition, oil companies agreed to supply its products to the domestic market only.

Over the weekend, fuel shortages began in the Altai region in southern Siberia after gas stations ran out of fuel. Later, the situation expanded to Tomsk, Irkutsk and Novosibirsk where filling stations were either closed or selling limited quantities of gasoline.

"If the situation persists, many regions may be left without fuel altogether in the next few days," warned Russian Fuel Union (RFU) President Evgeny Arkusha. "Oil producers have started exporting more oil products, which has finally resulted in a fuel deficit on the domestic market."

Furthermore, Kudryashov predicted that the gasoline prices will rise within five percent in the near future. The Minister added that the hike was caused by an increase in crude oil prices as well as in the gasoline tax charged to customers.

Gasoline price rises were reported at between 2 and 20 percent this week across the country but the situation is expected to stabilize after freezing exports. So far this year, Russia exported about 1 million tons of oil products, a significant decrease from the 3 million tons sold in 2010 during the same period.

On Wednesday, the Prosecutor's Office opened three court cases against Russia's top oil firm Rosneft and Gazprom Neft, Gazprom's oil division, for stopping delivering fuel in the Siberia region.

Gazprom Neft informed it has sent an additional 5,000 tons of fuel to the Altai region, exceeding by far (around 35 percent) the amount supplied in April. Furthermore, the oil firm committed to deliver an additional 30,000 tons.

Lukoil's Vice President Leonid Fedun said that the recent shortage of fuel on the domestic market could be caused by a growth in demand for gasoline of around 30 to 40 percent, resulting from an increase in car sales. He added that Lukoil had no problems with fuel supplies to customers in any region.

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