Fuel Shortage and Price Surge in Russia Follow Ukrainian Strikes on Refineries

Russia Faces Gasoline Shortages

According to ХВИЛЯ: Strikes by Ukraine against Russian oil refineries have triggered a severe gasoline shortage and a sharp rise in fuel prices across the country. These attacks, carried out using Ukrainian drones and missiles, hit not only fuel depots and pipelines but also catalytic cracking units. As a result, gasoline production dropped by a quarter, leading to long lines at gas stations nationwide. In response, pump prices have climbed by at least ten percent.

Russian Prime Minister Mikhail Mishustin has ordered state statistics agencies to halt the publication of weekly fuel price reports-a clear sign of the crisis's gravity. Moscow now plans to import fuel from Kazakhstan, Belarus, and other nations, while China remains the only supplier of refinery equipment. Installing new machinery could take up to 18 months.

Social and Economic Fallout

The gasoline shortage has hit Crimea the hardest, with signs of strain also emerging in Kaliningrad. According to a recent poll, three-fifths of Russians believe the economic situation in their region is deteriorating. President Vladimir Putin has acknowledged the fuel deficit, underscoring the depth of the country's economic troubles. Russia's budget deficit has doubled its annual target, and its reserve fund has shrunk by more than two-thirds. Oil and gas revenues have fallen, while the corporate sector is drowning in debt.

A new report titled "Endgame" from the Kiel Institute for the World Economy warns that Russia is experiencing structural exhaustion. The report's authors propose a tariff to support Ukraine, which could act as a new levy on the remnants of European trade with Russia. Edward Lucas notes that Russia is 'dropping the ball time and again,' while Moritz Schularick suggests the country could 'turn Russia's growing economic vulnerability into a long-term strategic lever.' For the first time in years, Russia's economy is directly hitting the daily lives of ordinary citizens, creating fresh challenges for the state.

The fuel shortage in Russia shows how the economic consequences of military actions continue to affect everyday life. By targeting critical infrastructure, Ukraine is not only weakening the enemy's economy but also stirring social and political problems within Russia. Rising fuel prices and queues at gas stations could fuel social unrest, which in turn may threaten the stability of the Russian government.

The ongoing fuel crisis in Russia is further exacerbated by the introduction of sales restrictions across numerous regions. As the gasoline shortage deepens, authorities are implementing measures to manage dwindling supplies, affecting daily life for many citizens. For a closer look at how these restrictions are shaping the situation in 83 regions, see our detailed report on the fuel crisis in Russia.