Russia sees consecutive record-breaking gasoline prices for two days in a row
In recent weeks, fuel prices in Russia have been on a steep rise, with significant impacts on both the wholesale and retail markets. This surge can primarily be attributed to a reduction in refining capacity following drone attacks on two major Rosneft refineries, the Novokuybyshevsk and Ryazan refineries [2][4].
The Novokuybyshevsk Refinery, with a production capacity of 8.3 million tons per year, has ceased all production, while the Ryazan Refinery, one of the top five largest in Russia, has halted approximately half of its output due to damage to two of its three processing units [2][4].
These physical supply shocks have led to a shortage in fuel supply, compounded by domestic market pressures. In response, the Russian government imposed a complete ban on petrol exports since late July to stabilize domestic supply [1][4]. However, the prices have continued to rise, indicating that supply constraints are severe and not easily mitigated by policy.
The benchmark price for Ai-95 petrol broke historic records, exceeding 80,000 roubles per ton (around $1,000 USD) by early August 2025 [1][3]. This surge has translated into significant rises in retail fuel prices in cities like Moscow, with AI-92 and AI-95 gasoline prices increasing by nearly 1 ruble (~$0.012) on average over July and early August [2][4].
The price rise is expected to persist at least until the fall of 2025, given ongoing refinery repairs that may take weeks to months [3]. Analysts at Alfa Bank warn that this rapid increase in wholesale fuel prices may herald an acceleration in retail price growth [1].
The crisis has exposed structural vulnerabilities in Russia’s fuel market, including over-reliance on a few large refineries, insufficient reserves, and inadequate protection against precision drone attacks [3]. The government's export ban is a temporary measure and may be supplemented by further interventions such as price controls or production mandates if the situation worsens [3].
The annual increase in retail fuel prices in Russia has exceeded 11%, according to Rosstat [5]. Other factors contributing to the fuel shortage include frequent refinery repairs, low stocks at private gas stations, increased car usage due to airport issues, and a 30% increase in wholesale fuel prices since the beginning of the year [5].
This fuel price surge is expected to cause broader inflationary pressures affecting transport, logistics, and the overall economy [1]. The surge in fuel prices, coupled with the ongoing conflict in Ukraine, may contribute to accelerated price growth for a wide range of goods and services in the future, according to Alfa Bank [5].
References:
- The Moscow Times
- Reuters
- Alfa Bank
- Rosneft
- Rosstat
- The ongoing fuel crisis in Russia, driven by the drone attacks on major refineries and compounded by domestic market pressures, has significant implications for both the energy and finance sectors, as the government imposes measures like export bans and potential price controls to stabilize the market.
- The increases in retail fuel prices, which have surpassed historical records, have swept across cities like Moscow, impacting the cost of not only energy but also transportation and logistics, creating broader ripples throughout the Russian economy that could lead to accelerated inflation for various goods and services.
