Russia Turns to India for Gasoline Amid Domestic Shortages

Russia has begun sourcing gasoline from India as fuel shortages escalate nationwide, largely due to continuous Ukrainian drone attacks targeting its energy infrastructure. This marks a notable shift for a major global energy producer that typically exports fuel rather than imports it to sustain its domestic market.

Reports indicate that fuel shortages are affecting Russia's extensive territory, resulting in rationing, extended queues at petrol stations, and substantial increases in gasoline prices. According to the Reuters news agency, shipments of gasoline from India by sea have commenced, with initial reports confirming that at least 60,000 metric tons have been dispatched. Sources indicate that two tankers carrying between 30,000 and 40,000 tons each have already set sail, although the specific Indian refiner supplying the fuel remains unidentified.

This strategy of importing fuel arises as Russian officials acknowledge the need to seek supplies from various countries at acceptable prices. The unprecedented shortage of fuel follows months of focused drone strikes from Ukraine that have disrupted Russian oil refining operations and contributed to diminishing domestic fuel availability. The impact of these attacks is felt increasingly throughout Russia, with disruptions particularly pronounced in regions dependent on fuel supply.

During the summer, Russia consumes over 110,000 metric tons of gasoline daily, as demand peaks. To alleviate the crisis, Moscow has plans to import up to 400,000 metric tons of gasoline monthly from several nations until domestic production stabilises. Additionally, Belarus has enhanced its exports to assist with the fuel deficit, almost tripling its rail shipments of gasoline to Russia in June compared to the previous month.

To further mitigate the ongoing crisis, Russia's parliament has approved amendments to the tax code, which include financial support for imported fuel and adjustments linked to delivery costs from India. President Vladimir Putin has publicly acknowledged the role of Ukrainian attacks in exacerbating fuel shortages across Russian territories and assured that the government is working to address these issues. Despite the situation, he stated, “All the strikes, wherever they hit our infrastructure, absolutely do not affect the situation on the front.”

In the backdrop of these developments, India has been progressively enhancing its energy trade with Russia. Recent ship-tracking data points to an unprecedented increase in Indian crude oil imports from Russia, rising to record levels in June. Indian refiners have ramped up purchases of discounted Russian crude in response to supply disruptions caused by the temporary closure of the Strait of Hormuz. Notably, this has resulted in Russia supplying over half of India's crude oil imports in June, an increase from 36.5 per cent in May. Preliminary estimates suggest India imported approximately 2.7 million barrels of Russian oil per day during this period.

This surge in energy purchases further solidifies the growing economic ties between New Delhi and Moscow, amid continued efforts by Western countries to isolate Russia financially due to the ongoing conflict in Ukraine.