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Shortages force Russia to stop fuel exports

Shortages force Russia to stop fuel exports
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Faced with a worsening fuel supply crisis, Russia – which is the world’s largest oil producer – has stopped the export of petrol and diesel during May.

Since February Russian oil companies have boosted the amount of the fuel they export in response to an order from Prime Minister Vladimir Putin to limit prices at the pumps.

That led to shortages. The Kremlin has now raised duty on exported fuel to force the companies to supply the domestic market.

Deputy Energy Minister Sergei Kudryashov said: “From February, sharply higher oil prices meant companies maximized their earnings by exporting most of their fuel production. Now – after this government intervention – all Russian oil companies’ production will go to the domestic market.”

In the early part of the year – as fuel price limits were introduced – exports increased by 40 percent from the same period a year earlier while domestic deliveries fell six percent.

At just 60 euro cents a litre in Moscow, petrol is less than half the average in western Europe.

Announcing the move to address shortages Russia’s Deputy Energy Minister said he does not think it is possible to regulate oil product prices and he expects petrol prices to rise five percent in the near future.