Business Desk : Russia has temporarily banned exports of petrol and diesel to all countries outside a circle of four ex-Soviet states with immediate effect, in order to stabilise the domestic market.

“Temporary restrictions will help saturate the fuel market, which in turn will reduce prices for consumers,” the Kremlin said in a statement.

The energy ministry said the measure would prevent unauthorised “grey” exports of motor fuels.

Diesel prices in Europe jumped 5% to more than $1,000 a tonne in response.

In recent months Russia has suffered shortages of petrol and diesel. Wholesale fuel prices have spiked, although retail prices are capped to try to curb them in line with official inflation. Brent crude prices are approaching $100 a barrel, and rose 1% to $94 on Thursday.

The crunch has been especially painful in some parts of Russia’s southern breadbasket, where fuel is crucial for gathering the harvest. A serious crisis could be awkward for the Kremlin as a presidential election looms in March.

The government said the ban did not apply to fuel supplied under intergovernmental agreements with members of the Moscow-led Eurasian Economic Union, which includes Belarus, Kazakhstan, Armenia and Kyrgyzstan.

Traders said the fuel market has been hit by factors including maintenance at oil refineries, bottlenecks on railways and the weakness of the rouble, which incentivises fuel exports.

Russia has already cut its seaborne diesel and gasoil exports by nearly 30% to about 1.7m metric tonnes in the first 20 days of September compared with the same period in August, according to traders and London Stock Exchange data.

The Kremlin statement added: “Previously, to stabilise the situation on the fuel market, the government raised the mandatory supply volumes of motor gasoline and diesel fuel to the commodity exchange … Daily monitoring of fuel purchases for the needs of agricultural producers with prompt adjustment of volumes has also been set up.”

Source: The Guardian