Putin directs hundreds of billions in subsidies to oil refineries after Ukrainian attacks – Bloomberg

Russian leader Vladimir Putin has eased the rules for subsidising the country's oil refineries, allowing them to receive billions of roubles in financial support from the state budget.

Source: Bloomberg

Details: According to a presidential decree published on Sunday 12 October, refineries will now be eligible for subsidies even if wholesale market prices for diesel and petrol significantly exceed the government's set price limits.

The new rules will be in effect from 1 October to 1 May and are intended to encourage Russian oil producers to continue supplying fuel to the domestic market at a time when export prices are becoming more attractive.

Previously, the government provided such subsidies only if the wholesale market price for petrol did not exceed the threshold by more than 10%, and for diesel by more than 20%. Once those limits were surpassed, state payments were suspended. Now, according to Russian Deputy Prime Minister Alexander Novak, the maximum permitted increase in market prices will be raised to 20% above the threshold for petrol and 30% for diesel.

Quote from Bloomberg: "Russia paid 1.8 trillion roubles (US$22 billion) in fuel subsidies last year, while payments over the first nine months of 2025 fell to 716 billion roubles. Since early August, Ukraine has intensified attacks on the Russian oil industry, with repeated strikes on refineries resulting in a drop of crude-processing rates, exacerbating a fuel crunch and leading to rising domestic prices."

Background:

• According to BBC estimates, at least 57 Russian regions have experienced fuel shortages following Ukrainian strikes on Russian refineries. The Moscow Times reported that the attacks have affected one in three refineries across Russia.
• Data from Reuters, Bloomberg and S&P Global Commodity Insights indicates that at least 10 facilities, including export-oriented ones, were partially or completely shut down between August and September.
• In response, the Russian government has introduced a temporary ban on petrol exports and imposed restrictions on other types of fuel until the end of 2025.
• Ukrainian President Volodymyr Zelenskyy said that long-range strikes have caused fuel shortages in Russia amounting to 20%.

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