Russia lifts ban on diesel exports by pipeline for producers who ship 50% of output to domestic market

MOSCOW. Oct 6 (Interfax) - The Russian government has approved additional measures to stabilize the domestic fuel market, lifting the export ban for diesel fuel transported to seaports by pipeline on the condition that the producer supplies at least 50% of produced diesel to the domestic market, the government press service reported.

In order to prevent so-called grey exports after current restrictions are lifted, the government has also imposed a prohibitive export duty on oil products, set at 50,000 rubles per tonne for suppliers who do not produce oil products themselves but buy them on the market for resale.

"In this way the government precludes attempts by traders to acquire fuel ahead of time for subsequent export after the lifting of current restrictions. This will also prevent them from exporting classed fuel under the guise of other products," the press release said.

The government has also decided to make amendments to the Tax Code and restore the damper fuel subsidy as of October 1.

"Changing the coefficient for the damper from 0.5 to 1.0 will make it possible to increase the amount of compensation to oil refineries for lost income on sales of motor fuel on the domestic market. This will make it possible to provide economic incentives to saturate the domestic market with fuel and curb the growth of wholesale exchange prices, which in turn will help maintain a stable price situation in retail at a level close to inflation," the release said.

The government has also revised requirements for oil companies regarding the sale of diesel and Class 5 gasoline in exchange trading, raising them to 12.5% of output from 9.5% for diesel and to 15% from 13% for gasoline.

"The sale of a portion of fuel produced by Russian oil companies on the exchange gives independent filling stations an opportunity to acquire it at market prices. This approach reduces the risks of monopolistic pricing, since many dominant participants of the fuel market have their own chain of filling stations," government said.

"The approved changes will make it possible to increase the guaranteed amount of supply in-demand fuel in exchange trading and increase the share of transactions carried out on competitive terms," the government said.