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Russia, one of the world’s largest oil producers and exporters, is grappling with an unusual problem: fuel shortages, rationing and the fastest rise in gasoline prices in at least two decades.
The paradox is stark. Even as the Kremlin continues to earn billions from oil exports, motorists across the country are facing long queues at petrol stations, regional fuel restrictions and rapidly rising prices. The crisis has become so severe that airlines are warning that operating flights is becoming economically unviable, while authorities are considering emergency measures ranging from export curbs to fuel imports.
Gasoline prices hit a 20-year record
The latest data from Russia’s Federal Statistics Service shows average gasoline prices jumped 3 per cent in just one week between June 16 and June 22, reaching 71.20 rubles per litre. According to historical records, this is the biggest weekly increase in domestic fuel prices since at least 2006.
Diesel prices have also climbed sharply, rising 2.7 per cent during the same period.
The price surge is being felt across the country. Fuel supply disruptions or rationing measures are now being reported in a majority of Russian regions, while panic buying has worsened shortages as drivers stockpile fuel in canisters.
Ukrainian drone strikes are disrupting refining capacity
At the heart of the crisis is a sustained Ukrainian campaign targeting Russia’s oil refining infrastructure.
Since late May, Kyiv has intensified long-range drone attacks on refineries, fuel depots and energy facilities deep inside Russian territory. The strikes have significantly reduced the country’s refining capacity, creating bottlenecks in fuel production even as crude oil output remains high.
According to Reuters, gasoline production between June 15 and June 21 was about 25 per cent lower than average daily levels recorded during the same period last year.
Russia’s overall oil product output fell 13.5 per cent in May, while gasoline production during the first half of June dropped roughly 15 per cent compared with a year earlier.
The most damaging blow came in Moscow, where Ukraine’s largest-ever drone attack on the Russian capital severely damaged the city’s main refinery.
The facility, operated by Gazprom Neft, is the largest supplier of fuel to the Moscow region. Industry sources told Reuters that the refinery could remain offline for at least six months, with some reports suggesting full restoration may take considerably longer.
The refinery processed 11.6 million metric tonnes of crude oil in 2024 and produced nearly 3 million tonnes of gasoline and more than 3 million tonnes of diesel, making its disruption a major setback for domestic fuel supplies.
Airlines warn of jet fuel shortage
The impact is extending far beyond motorists.
Russian carrier Azimuth Airlines has warned that a growing shortage of aviation fuel is making flight operations increasingly uneconomical.
According to a statement cited by aviation Telegram channel Aviatorshchina, the airline’s primary supplier informed it that jet fuel deliveries would be cut by roughly one-third because of force majeure conditions at refineries.
Alternative suppliers have reportedly been unable to fill the gap.
As supplies tightened, jet fuel prices at Russian airports surged by an average of 17 per cent in June. In Makhachkala, kerosene prices jumped 64 per cent to around 157,000 rubles.
Under such conditions, Azimuth said maintaining scheduled domestic and international flights “loses all economic rationale” and urged authorities to intervene.
Fuel rationing spreads across Russia
The shortages have forced local governments to introduce restrictions on fuel sales in several regions.
Authorities in Bryansk, Kursk and Kurgan have imposed limits on purchases and banned sales into canisters to prevent hoarding.
In Kurgan, motorists can purchase no more than 40 litres of gasoline and 80 litres of diesel in populated areas. Similar restrictions have appeared in other regions, including Irkutsk, Omsk, Novosibirsk and the oil-rich Khanty-Mansi Autonomous Okrug, which accounts for roughly 40 per cent of Russia’s crude production.
The situation is particularly acute in occupied Crimea, where reports indicate gasoline sales to the public have been suspended at some filling stations.
Regional officials have acknowledged growing public anxiety, warning that panic buying is worsening the crisis.
Inflation risks emerge
The fuel crunch is also becoming a broader economic problem.
Russia’s central bank governor Elvira Nabiullina has described lower refinery output as a new inflation risk, highlighting the potential spillover effects on transportation, logistics and consumer prices.
Annual inflation has already risen to 5.8 per cent, according to local reports, with higher fuel costs expected to feed through the wider economy in coming months.
Deputy Prime Minister Alexander Novak has sought to reassure markets, describing the situation as “difficult but under control” and attributing shortages to logistical disruptions in certain regions.
However, the government is reportedly considering a diesel export ban and tax incentives to prioritise domestic supplies. Russian media have also reported discussions about importing fuel to ease shortages in the hardest-hit regions.
Why an oil giant can still face a fuel crisis
Russia’s predicament highlights a key distinction in energy markets: producing crude oil is not the same as producing usable fuel.
While Russia remains one of the world’s largest oil exporters, gasoline, diesel and jet fuel must first pass through refineries before reaching consumers. When those refineries are damaged or shut down, fuel supplies can quickly tighten regardless of how much crude oil the country pumps.
That reality is now playing out across Russia.
Despite retaining vast oil reserves and continuing to export energy abroad, the country’s refining network has become an increasingly vulnerable target in the war with Ukraine. The result is a fuel crunch that has pushed gasoline prices to a 20-year high, disrupted aviation operations and forced authorities to ration supplies in regions thousands of kilometres apart.
Russia’s economy continues to avoid outright contraction, supported by government spending and resilient export revenues. But the fuel crisis shows that Ukraine’s drone campaign is imposing growing costs on the Kremlin’s domestic economy — and exposing weaknesses in one of the world’s biggest energy producers.
With inputs from agencies.
