Russian gasoline and diesel prices have continued to climb, driven by ongoing Ukrainian drone attacks that have reduced or halted production at the country's oil refineries, exacerbating a domestic supply crunch. According to Russia's Federal Statistics Service, average retail gasoline prices increased 2.3% week-on-week to 75.84 rubles ($0.98) per liter from July 7-13, while diesel costs rose 3.2% to 91.21 rubles per liter. In Moscow, gasoline reached 72.84 rubles per liter, and in St. Petersburg, it was 70.75 rubles per liter.
The International Energy Agency reports that Ukrainian attacks have impacted over half of Russia's refining capacity since May, with Russian plants processing 3.8 million barrels per day in June, nearly one-third less than the previous year. Bloomberg's tally indicates more than 40 attacks by Ukrainian forces on fuel-producing facilities since May, hitting at least 23 out of 34 major refineries. Crude-processing rates have plunged to 3.91 million barrels per day this month, the lowest level in over 21 years, more than 1.4 million barrels per day below the year-ago average.
This crisis has led the government to ban almost all exports of diesel, gasoline, and jet fuel, and regional authorities have introduced fuel rationing to combat panic buying. So far this year, retail gasoline prices have risen 16.4% and diesel prices 18%, significantly outpacing the 4.64% gain in inflation. The central bank highlighted that rising fuel prices have a substantial impact on the cost of other goods and services, warning of increased inflation risks and a possible pause in its easing cycle before its upcoming meeting. The Kremlin faces mounting pressure ahead of parliamentary elections in September due to these economic challenges.
