Russia Has No Plans Yet to Further Ease Diesel Export Rules

Russia Has No Plans Yet to Further Ease Diesel Export Rules

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(Bloomberg) — Russia doesn’t currently have plans to ease remaining restrictions on diesel exports, according to Deputy Prime Minister Alexander Novak, indicating that there won’t be additional relief for the tight fuel market.

“There are no decisions yet,” Novak told Bloomberg News in Beijing. “But if there are any problems, they will be considered by the Energy Ministry.”

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While Russia — the world’s top seaborne supplier of diesel-type fuel — lifted a ban on most exports in early October, some restrictions remained in place.

The government allowed the exports on condition that all major Russian fuel producers keep at least 50% of their diesel output for the domestic market. Also, diesel exports are possible provided that the fuel is delivered to the Russian ports by pipeline. Diesel supplies via railways remain banned.

The initial ban, which helped to tame surging domestic prices for the road fuel, roiled global diesel markets. It came as OPEC+ output cuts reduced flows to refiners, which were struggling to make enough diesel just as demand ramps up before the northern winter.

The Russian ban on diesel exports lasted for just over two weeks, with Moscow opting to remove most of the restrictions to avoid overstocking of fuel inventories.

The Russian government is continuing discussions on how to finance higher subsidies for domestic supplies of diesel and gasoline, according to Novak. “The issue is being considered,” he said, adding that a decision is expected “in the near future.”

Russia plans to fully restore downstream payments to the nation’s refiners from October after halving them last month. Any decisions to the subsidy formula should be neutral to the budget, Deputy Finance Minister Alexei Sazanov said at the end of September, according to Interfax.

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