Petrol Retained in Country: Will the Export Ban Lower Prices

From April 2 to July 31, Russia has implemented a ban on the export of petrol for all market participants. Despite rising petrol prices since the beginning of the year, they have now begun to decline, even as domestic production decreases and demand typically increases with the onset of spring. The surge in global oil and petroleum product prices, including petrol, driven by the ongoing conflict in the Middle East, on one hand, encourages producers to sell petrol on foreign markets. On the other, these high global prices provide oil companies with the opportunity to receive substantial compensation from the government. Forbes delves into the dynamics of petrol price increases, the rationale behind the export ban, its expected duration, and its potential impact on Russian oil producers. On April 2, the Russian government published a decree imposing a complete ban on petrol exports until July 31, 2026. The government announcement stated, “This decision has been made to maintain stability in the domestic fuel market during the period of high seasonal demand and agricultural fieldwork, as well as in light of rising global oil prices amidst the prevailing geopolitical situation in the Middle East.” The restriction will not affect deliveries under international intergovernmental agreements, as noted in the decree. In 2025, a complete petrol export ban was enacted on August 31 due to a sharp rise in wholesale and retail prices, remaining in effect until the end of February 2026. This ban was lifted following a decrease in prices, according to Sergey Tereshkin, CEO of the petroleum marketplace Open Oil Market. Although petrol prices began to rise on January 12, 2026, the first trading day of the year on the St. Petersburg exchange, they were still lower than in August, when the ban was imposed. On February 27, just prior to the removal of the embargo, the price of AI-92 petrol stood at 59,263 roubles per tonne, down 13.3% from the last trading day before the export ban, when the price was 68,435 roubles per tonne. AI-95 fell even more sharply, by 20.7%, to 62,677 roubles per tonne from 79,054 roubles. Russian customs statistics have been closed since 2022. According to the latest available data, Russia exported 4.4 million tonnes of motor petrol in 2021, reflecting a 24.5% decline compared to 2020. The total production volume in 2021 was reported at 40.8 million tonnes. Data on petrol production has been closed down by Rosstat since 2024. Deputy Prime Minister Alexander Novak estimated the volume for 2024 at 44.1 million tonnes and anticipated its maintenance or slight growth in 2025. Forbes sent inquiries to major Russian oil companies — Rosneft, Lukoil, Surgutneftegas, and Gazprom Neft — asking whether they have ceased petrol exports, but received no responses by the time of publication. The directive to impose a complete petrol export ban was issued on March 27 by Vice Premier Alexander Novak, following a meeting with representatives from oil companies and relevant authorities. Just prior to the meeting, on March 26, Alexander Dyukov, head of Gazprom Neft, suggested the implementation of a full petrol export ban for two to three months, stating that this measure was necessary to prevent the outflow of fuel from the Russian market to international markets where prices are significantly higher.

How Petrol Prices Increased

Petrol prices, which had been rising since the start of the year, began to fall on March 25, likely following reports that authorities were discussing the introduction of an embargo. On March 24, the prices for AI-92 petrol peaked, having risen by 25% since the start of the year to 68,504 roubles per tonne. The price of AI-95 petrol rose even more sharply by 31%, reaching 77,483 roubles per tonne. By April 2, AI-92 was trading at 65,196 roubles per tonne, down 4.8% from its peak, while AI-95 cost 70,031 roubles per tonne, decreasing by 3.4%. On March 19, a week before Novak's meeting with oil producers, Anton Rubtsov, the director of the oil and gas complex department at the Ministry of Energy, stated that petrol reserves in the country stood at 2 million tonnes, greater than a year prior. He added that the ministry was expecting an increase in refining volumes at oil refineries. Nevertheless, prices continued to rise. Factors contributing to the growth included an increase in excise duties of 5.1% and an increase in VAT from 20% to 22% effective January 1, 2026, according to Maxim Shevyrenkov, head of the raw materials market analysis centre at the Institute for Energy and Finance (IEF). Scheduled maintenance at major oil refineries and drone attacks also forced companies to cut back on refining activities. Additionally, the conflict in the Middle East led to a surge in global oil and petroleum product prices. The surge in exchange prices for petrol was linked to oil producers' attempts to recuperate losses, as noted by Tereshkin of Open Oil Market. Compensation payments to oil companies through the so-called dampener in January 2026 amounted to 16.9 billion roubles, a 90% decrease compared to January 2025, when payments reached 156.4 billion roubles. In February 2026, oil companies contributed 18.8 billion roubles to the budget. The dampener is paid to oil companies from the budget as compensation for supplying fuel to the domestic market at prices below export levels. If the export price of fuel, determined by the Federal Antimonopoly Service (FAS), is lower than the domestic price, the oil producers are required to pay the difference to the budget. The calculation formula for dampener payments is quite complex, as explained by Tereshkin, and it takes into account several special coefficients, including the price of petrol in Rotterdam, average handling costs at Russian ports and maritime transportation, as well as the price of benchmark Brent crude oil. In Tereshkin’s estimation, informal agreements between fuel producers and regulators may have also played a role in the rise in exchange prices, potentially prompting oil companies to curb fuel price increases at the end of the previous year. This is indirectly evidenced by the price reductions at the end of 2025. “The suppression of prices was intended to provide regulators with more or less acceptable inflation metrics at the end of 2025, but it backfired into a price spike at the beginning of 2026,” he noted. Annual inflation in Russia accelerated to 6% in January from 5.6% in December and remained high at 5.9% in February.

The Rationale Behind the Ban

The decision to impose a petrol export ban was made considering two factors, according to investment strategist Sergey Suverov from Ark Capital Management. Firstly, with the arrival of spring, petrol demand increases due to the higher usage of private cars compared to winter. Simultaneously, Suverov noted, production is decreasing due to attacks on oil refineries and energy infrastructure. By imposing restrictions, the government attempted to prevent a potential shortage in the domestic market. However, Suverov believes prices will continue to rise that due to inflation. “The saturation of the domestic market may contribute to a certain slowdown in growth,” he cautioned. The impact of the export ban on increasing physical supply in the domestic market may be minimal, according to Shevyrenkov from IEF. He noted that Russia exports a relatively small volume of petrol, mainly under intergovernmental agreements, chiefly with Mongolia and the countries of the Eurasian Economic Union: Armenia, Belarus, Kazakhstan, and Kyrgyzstan, which will not be affected by the ban. Data on petrol export volumes and directions are confidential, but Shevyrenkov estimated that beyond supplies under intergovernmental agreements, Russia could export approximately 100,000 tonnes of petrol per month given domestic consumption exceeding 3 million tonnes monthly. He believes that the ban will limit the impact of high global petrol prices on the Russian market, as producers will lose an appealing export alternative. Due to the war in the Middle East, global oil prices remained elevated throughout March, ranging from $80 to $110 per barrel, and as dampener payments are calculated with a one-month delay, producers are entitled to significant payments already in April, according to Tereshkin from Open Oil Market. He estimated that oil companies could receive over 200 billion roubles from the budget this month. This is likely to slow the rise in exchange prices in April and May. However, Tereshkin warns that seasonal demand increases could push prices up despite the export ban. “Much will depend on whether regulators opt to revise the dampener formula to ensure high subsidies for Russian oil producers if global prices for petroleum products begin to decline,” Tereshkin mentioned. In October 2025, Vladimir Putin signed a decree allowing oil companies to receive guaranteed compensation, but it expires on May 1, 2026, and decisions need to be made regarding the future of the dampener payment scheme. Despite the high dampener payouts, producers still found it tempting to sell individual batches of petrol abroad due to high global prices, states Shevyrenkov from IEF. Suverov from Ark Capital suggests that companies, even when receiving substantial compensation, may have continued exporting petrol to maintain relations with international clients and generate revenue in foreign currency, which could be used to procure equipment or spare parts. If the situation regarding attacks on oil refineries and port infrastructure does not improve before the ban ends, the embargo will likely need to be extended, Suverov suggests. Shevyrenkov from IEF also considers the possibility of prolongation in the event of a prolonged conflict in the Middle East. Source: Forbes