Gasoline Shortage Is Approaching Moscow

The fuel crisis that emerged in August has already engulfed at least 20 Russian regions.

The gasoline shortage that emerged in Russia after a series of drone attacks on major refineries continues to intensify and is getting closer to the country's central regions, Reuters writes, citing fuel traders and market participants.

The fuel crisis that emerged in August has already covered at least 20 Russian regions, from Chukotka and Sakhalin to the Ryazan and Samara regions. First of all, small private networks of gas stations stop selling gasoline, while sales continue at the gas stations of oil companies, although there are local disruptions in some types of fuel, Reuters sources said.

They said that one of the reasons for the current problems is that private gas stations did not create stocks due to expensive loans and entered the season of high demand almost without gasoline reserves. The situation worsened sharply in August, when at least five refineries were forced to halt production due to UAV strikes, and in total the oil industry lost 17% of refining capacity.

"The situation for gasoline is very bad and is still deteriorating," one of Reuters' sources said. In September, four more refineries - Ryazan, Saratov, Novoil in Ufa and Kinef in the Leningrad region - were hit by UAV raids. The latter was forced to shut down its main oil refining unit and will soon be operating at three-quarters capacity.

The oil majors regularly postpone gasoline shipments in a bid to secure their gas stations, sources told Reuters. "This is my gasoline, which I bought and paid for on the exchange from them, and which they have not unloaded to me for a month and a half," one trader complained. He said it is more profitable for oil companies to pay a 5% penalty for failing to fulfill a contract on the exchange than to ship gasoline, and they often offer to terminate contracts themselves.

In eastern Siberia, some gas stations have stopped selling some products, while others are closing when there is no fuel or because they do not want to trade at a loss, a representative of one of the region's gasoline chains told Reuters. According to him, many small chains simply do not buy fuel anymore: "There is no point, as it is very expensive and retailers get minuses."

Some gas stations on the highways of the Vladimir and Belgorod regions have suspended operations. "The director decided to temporarily close the gas station because there is no gasoline. Also closed a gas station in a neighboring village, and on others - just some gasoline is not available. The chain ones are all working," said an employee of one of the closed gas stations.

Fuel production in Russia fell by about 5% in August, Reuters sources said earlier. Oil companies have brought undamaged capacity at operating refineries back on line to compensate for downtime at refineries hit by UAV raids. A total of 23% of the country's refinery capacity (6.4 million tons) was idle last month, a historical record.

In response, the government instructed oil companies to print gasoline reserves, adjust the program of scheduled refinery repairs, and began to manually regulate the transportation of fuel by rail. Also, to stabilize the situation, the ban on fuel exports was extended for two months.

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