Gasoline Shortage Looms in Russia
Source: The Wall Street Journal, Jacob Gronholt-Pedersen (4/27/11)
"Russian car-owners are seeing petrol stations halt operations across the country."
Russian car-owners are seeing petrol stations halt operations across the country, following an order by Prime Minister Vladimir Putin in February to investigate steep increases in gasoline prices, which led producers to ship more fuel for exports.
Russia consumes about half of the 10 million barrels it produces a day domestically, but prices on oil products, including gasoline, are kept artificially low. The government's attempt to control gasoline prices is just one of several measures aimed at curbing inflation—a key political issue with elections less than a year away, as higher gasoline prices could hurt Mr. Putin's popularity.
Russia's antimonopoly agency has repeatedly accused the country's top oil producers of increasing prices for diesel and jet fuel.
After gasoline prices rose at the end of last year and another 4% in January, Prime Minister Vladimir Putin in February warned the country's top oil executives against price fixing. Mr. Putin accused them of trying to "crudely exact maximum gains" and vowed more oversight of the fuel business, effectively capping prices. As a result, prices declined both in February and March, despite the continued surge in global crude prices.
"The domestic prices are being held artificially low due to pressure from regulatory authorities," TNK-BP's Chief Financial Officer Jonathan Muir said Wednesday.