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Petrol prices in Russia highest in 13 years after Ukrainian drone attacks on refineries

Friday, 27 December 2024, 15:31
Petrol prices in Russia highest in 13 years after Ukrainian drone attacks on refineries
Petrol station. Stock photo: Getty Images

Russians are facing the biggest increase in petrol prices of the last 13 years.

Source: Moscow Times

Details: The reason is reported to be drone attacks on refineries, which led to a reduction in fuel production by more than 10% in the first half of 2024.

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Petrol prices rose 11% to an average of RUB 60.57 (USD 0.6) per litre as of 23 December. Moreover, in remote regions such as the Far East, prices are a quarter higher than the average.

The publication notes that the price increase is the largest since 2011 when petrol prices jumped by 14.9%.

For the first time in six years, petrol prices have been rising faster than overall inflation, which the Russian Ministry of Economic Development estimates to be 9.7%. This could lead to further increases in the cost of goods, as the price of fuel is included in the cost of delivery.

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Following the attacks on refineries, the Russian government imposed a ban on petrol exports to keep prices stable. By the end of May, fuel production had declined 20% compared to December 2023. At the same time, production statistics were classified under the pretext of "geopolitics".

In 2025, analysts predict a further increase in petrol prices in the Russian Federation of 10-15% and, in an unfavourable scenario, up to 20%. The reasons for this will be an increase in transportation tariffs, rising excise taxes, and the impact of the rouble devaluation. The changes could bring an additional RUB 170 billion (USD 1.7 billion) to the Russian budget, but they will be a burden on consumers.

Background:

  • The Russian government decided to ban exports of motor petrol in September and October.
  • The Novoshakhtinsk Oil Products Processing Plant, the largest in southern Russia, shut down both primary oil refining units following an attack by Ukrainian drones.

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