Empty pumps, long queues: After the attacks on refineries, the shortage of gasoline in Russia is getting worse. What does this mean for the economy and could it even speed up the end of the war in Ukraine?
The Ukrainian attacks on refineries have led to a new fuel crisis in Russia. According to "Reuters", at least 30 regions have been affected. Unlike the previous wave, which began in late May and lasted until mid-July, this one mainly affects Moscow and the region around the capital. Gasoline sales at "Gazprom" and "Tatneft" gas stations in Moscow are now limited.
"You can't say that there is no gasoline at all. But the crisis is palpable. And it is not just a personal problem - not knowing whether you can leave the city and then return again, it is also an economic problem", Oleg Grigorenko from the Russian online portal – 7x7– tells DW. According to him, taxi drivers, courier companies and the construction industry in many regions are already registering a drop in orders - due to dependence on fuel for deliveries.
According to media reports, long queues are also forming at gas stations in the southern Russian region of Krasnodar. Many locals describe this as a nightmare in the middle of the summer season. – The calm in Sochi today is unusual - there are much fewer tourists. The main reason is that there is no gasoline in the city," local real estate agent Igor Zakharchenko wrote on Instagram.
The quality of gasoline is getting worse
According to Russian MP Igor Ananskikh, first deputy chairman of the Energy Committee, the supply of gasoline should return to normal within two to three weeks.
However, according to economic expert Nikolai Korshenevsky, this is unlikely. He also told DW that the quality of gasoline is deteriorating. His acquaintances sent him photos of their cars with reports of problems related to engine damage caused by bad gasoline. "The car no longer started and had to be taken for repair. Just like at car repair shops, you have to wait for months, and then you have to wait even longer for spare parts. Apparently, some cars cannot tolerate the gasoline that is available at gas stations. The war continues and there is no clarity on what is being produced and what is being mixed with it," Korshenevsky points out. According to him, the persistent problems in the oil and gas industry are harbingers of a deep crisis.
"Bloomberg" reports that during the war, Russian oil exports fell to a record low. At the same time, its production has also fallen. "In 2019, Russia produced 11.5 million barrels per day, today it is less than nine million. If this trend persists and deepens, the amount could drop to eight million barrels, and this would be a prerequisite for a large-scale economic and systemic crisis," Korshenevsky predicts. He does not see a quick solution to the problem – Russia is likely to follow the same path as Venezuela and become an economy with a chronically declining GDP.
The hopes for imports are an illusion
Economic analyst Vyacheslav Shiryaev, for his part, points out that compensating for the fuel shortage by importing from India, China or other countries, as proposed by the Russian authorities, will not work. "In the context of the isolation in which Russia finds itself, it is not possible to provide 200,000 tons of fuel per day, which approximately corresponds to the amount the country needs," he told DW.
Russian economist Igor Lipsits points out that it is impossible to quickly restore the damaged refineries. In addition, they are not insured against further air strikes. Therefore, the authorities are limiting fuel consumption. Ambulances, police and fire trucks, as well as security forces and administration vehicles, have the right to refuel, but the rest have to wait, and this is causing serious discontent, notes Lipsits, who was forced to leave his position at the Moscow State Institute of Economics for his criticism of the authorities.
The lack of fuel is not only an inconvenience for those who are used to driving - it can slow down the Russian economy to the point of creating huge problems for the Kremlin. Photo: Pavel Bednyakov/AP Photo/picture alliance
According to him, the development of things in Russia is very reminiscent of the decline of the Soviet Union. "The rulers relied on a special supply system, their own shops and warehouses, from which they could get everything they needed, and at low prices. This caused the anger of the Russians, and when Boris Yeltsin declared war on this closed system, the people enthusiastically supported him. "Now we are in a similar situation again," the expert says.
Key to ending the war?
Economic analyst Vyacheslav Shiryaev believes that Ukrainian attacks on targets in Russia, targeting both military and civilian facilities, could paralyze the Russian economy and hasten the end of the war. He believes that the war could end in just a few weeks if the West supports Ukraine in doubling or tripling the intensity of the attacks. "Ukraine could create disorganization and chaos inside Russia and cause a complete loss of control."
Shiryaev also believes that the lack of fuel could play a crucial role in undermining the stability of Vladimir Putin's regime. "If there is no diesel, 6,000 km of railway lines in Russia will remain unusable. In addition, hundreds of enterprises may stop working. Without fuel, trucks will not be able to move, food products will not be able to reach stores, and farmers will not be able to harvest their crops," he emphasizes. All of this, according to Shiryaev, could quickly thwart Putin's plans to continue the war. "If Ukraine destroys all oil processing, Putin will find that his orders are not being carried out," the expert says. And then everything will stop due to the lack of fuel.
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