By the End of the Year, russia Will Depend on Fuel Imports at the Level of up to 60%

The fuel crisis that has engulfed the rf is not so much the result of individual accidents or sanctions as it is a reflection of the profound degradation of its energy model. Years of underfunding, technological isolation, and poor management decisions have turned a once-profitable industry into a system that survives by inertia.

russian refineries, concentrated mainly in a few industrial centers in the European part of the country, remain backward in terms of technology and production structure. When some of those plants ceased operations, the country effectively lost a significant portion of its domestic capacity. Without at least six months of repairs in calm conditions, russia may find itself dependent on fuel imports at the level of up to 60 % by the end of the year.

Having banned petrol exports in September, the government of the rf attempted to stabilize the situation, but this move only exacerbated the crisis. It was foreign sales that made it possible to compensate for chronic losses and partially finance the modernization of the industry. Now, without foreign currency revenues, companies lack the resources for renewal, while price regulation in the domestic market creates an artificial shortage.

The problem is quickly spreading beyond the fuel sector. Rising petrol prices are pushing up transportation costs, which directly affects consumer goods prices. Combined with the increase in VAT, this creates the risk of a sharp acceleration in inflation. Official statistics will try to hide the effect, but consumers will feel it in their wallets.

The temporary measures taken by moscow only emphasize the hopelessness of the situation. Petrol imports from belarus and China cannot compensate for the losses, while attempts to increase the octane rating with chemical additives may reduce the  quality of fuel  and cause technical problems. As a result, instead of stabilization, russian authorities are faced with yet another front of economic risks – internal, costly, and uncontrollable front.