Russia to import diesel fuel while subsidising traders

Russia will begin importing diesel after Ukrainian strikes on oil refineries triggered a shortage estimated at nearly 40%, prompting filling stations to impose purchase limits and farmers to report supply shortages.

Source: The Moscow Times, an independent Amsterdam-based news outlet

Details: The Russian government has drafted legislation that would allow diesel imports, similar to petrol, which Russia already imports from Belarus, Kazakhstan and India.

Russia's Energy Ministry said an import damping mechanism would be introduced for diesel. Under the scheme, which already applies to petrol imports, oil and gas companies that import fuel will receive state subsidies to offset the difference between global and domestic prices.

The ministry said the measure would allow Russia to quickly secure fuel supplies from abroad while "maintaining the economic attractiveness of such deliveries for importers".

Historically, Russia itself has been one of the largest exporters of diesel, The Moscow Times said. Around 40-50% of its diesel production has typically been exported. In 2023, domestic consumption stood at 52.2 million tonnes, while exports totalled 35.7 million tonnes.

However, Ukrainian strikes on oil refineries, which have reduced Russia's oil processing to its lowest level in two decades, have cut diesel output by nearly 40% – a steeper decline than petrol production, which has fallen by about a quarter.

Farmers in southern regions, where the harvesting campaign has begun, are complaining about diesel shortages. Filling stations have introduced limits of 100-200 litres per customer, although a single combine harvester consumes roughly 300 litres during one shift.

Diesel prices surged 18.1% year-on-year by the end of June, the steepest increase in 15 years, according to Russia's state statistics agency, Rosstat. In the Southern Federal District, the average diesel price reached RUB 110 (US$1.40) per litre despite a ban on exports, imposed for the first time since 2023.

India is likely to become a supplier of diesel fuel to Russia, sources familiar with the matter told Reuters. They say that oil companies may turn to Indian refineries if the situation on the fuel market worsens.

So far, India has supplied Russia with just two petrol shipments totalling about 100,000 tonnes. By comparison, analysts at Energy Intelligence estimate the monthly shortfall in petroleum products at 400,000-600,000 tonnes.

Background:

• In the first ten days of July, median prices for AI-92 petrol in Russia rose by 20% and AI-95 increased by 24%.
• A fuel crisis is unfolding in Russia and the occupied territories amid ongoing Ukrainian strikes on oil refineries: shortages of automotive fuel, previously seen in occupied Sevastopol and Crimea, have spread to Moscow Oblast.
• It was also reported that petrol production in Russia has fallen to around 65% of average seasonal consumption after Ukrainian drone attacks forced major refineries to suspend operations.
• On 10 July, Russia's Deputy Prime Minister Alexander Novak stated that the market is experiencing a fuel shortage linked to the need to repair refineries following Ukrainian drone strikes.
• In early June, Novak acknowledged that Russian oil production had declined since the start of 2026 due to "unscheduled repairs" at refineries.
• On 8 July, Russia introduced a full ban on diesel exports and announced plans to begin imports.

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