Russian government says fuel cargos to take priority on railways

The Russian energy ministry said on Friday that the transportation of fuel would take priority on railways as the government tries to alleviate shortages and keep a lid on prices.

Separately, the government said later on Friday that Russian Deputy Prime Minister Alexander Novak told a meeting with oil producers, officials from energy and agricultural ministries, as well as Russian Railways, to ensure seamless transportation of fuel.

The Kommersant newspaper earlier said the government had issued an order, ensuring priority for transportation of fuel cargos via railways to tackle traffic congestion and meet a surge in seasonal demand, citing unnamed sources.

Russian refineries have cut fuel production due to outages and numerous Ukraine’s drone attacks.

Russian oil refiningcapacity shut down in the wake of Ukrainian drone attacks in the first quarter amounts to about 4.6 million metrictons (370,500 barrels per day), or some 7% of the total output, Reuters calculations show, on top of maintenance related to other causes.

Kommersantsaid Prime Minister Mikhail Mishustin issued the instructions on fuel transportation to the Russian Railways, Energy Ministry and the Ministry of Transport.

The Energy Ministry told Reuters that in accordance with its instructions, the ministry was drawing up monthly schedules for the transportation of petroleum products jointly with oil companies and the Russian Railways.

It also said that the government’s instructions will be monitored by a group headed by the Deputy Prime Minister Alexander Novak.

“Priority transportation from the refineries and delivery of petroleum products to consumers will ensure an increase in production as well as provide additional fuel supply to the regional oil depots during the period of seasonal demand growth,” it said.

“This will have a positive effect on the price situation on the motor fuel market.”

The government also said that domestic gasoline and diesel daily supplies have increased by 13,000 tons and 15,500 tons respectively in March so far from February.

It said that Russian gasoline and diesel inventories remain high, at 1.9 million tons and 3.4 million tons respectively.
Source: Reuters (Reporting by Vladimir Soldatkin; Editing by Elaine Hardcastle and Louise Heavens)