Fuel fallout Ukrainian drone strikes have pushed Russian gasoline prices higher than ever, and experts say a shortage could be looming

Wholesale gasoline prices in Russia have reached historic highs in the past week. On August 18, trading on the St. Petersburg International Mercantile Exchange pushed the national index for AI-92 up 1.33 percent to 71,516 rubles ($885) per ton. The exchange, which reflects average fuel costs across the country’s major refineries, saw AI-95 jump 2.19 percent to 80,430 rubles ($995).

The previous record for AI-92 was set nearly two years ago, in September 2023. AI-95 had last peaked less than a week earlier, on August 12, when the price rose above 80,500 rubles ($997) per ton. That was already the fifth (!) record high since the start of the month.

These surging prices are a direct result of the war in Ukraine. Ukrainian drone strikes regularly hit Russian refineries, taking them partly or fully offline.

Since early August, attacks have damaged key units at Rosneft’s Ryazan, Novokuibyshevsk, and Saratov refineries. Other targets this month include the Afipsky Refinery in Krasnodar Krai, Lukoil’s Ukhta Refinery in the Komi Republic, the Unecha pumping station in Bryansk region (a crucial link in the Druzhba pipeline), Lukoil’s Volgograd refinery, and another plant in Krasnodar Krai, Slavyansk ECO.

According to S&P Global, in the past week alone, refineries with a combined capacity of about 1.5 million barrels per day have been struck. An industry source told Kommersant that the situation is especially dire because it coincides with peak seasonal demand from summer travel and the upcoming harvest. Independent market players, the source added, have “almost no reserves left.”

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Refinery operators have not disclosed the scale of the damage, but Reuters sources estimate that repairs at Rosneft’s Ryazan and Novokuibyshevsk facilities could take around a month. The Bell also reported major damage at the Saratov refinery. Together, the three plants account for about 14 percent of Russia’s refining capacity.

Officials have tried to contain the fallout. At the end of July, Russia imposed export restrictions on companies producing more than one million tons of gasoline annually. On August 14, Deputy Prime Minister Alexander Novak backed the Energy Ministry’s proposal to extend the embargo through September.

But as The Bell pointed out, the volumes lost to drone strikes far exceed Russia’s weekly gasoline exports (40,000–50,000 tons), meaning the measures haven’t stabilized the market. To make matters worse, gasoline exports under intergovernmental deals with “friendly” countries are still allowed, Proleum’s managing partner Maksim Dyachenko told Kommersant.

Experts are split.

Kirill Bakhtin, senior analyst at BCS World of Investments, told Kommersant that wholesale prices “may already have reached a local peak” — provided there are no further outages.

But Sergey Frolov, managing partner at NEFT Research, argued that “most likely, prices won’t begin to fall for at least another month.” He expects stabilization by October, once vacation travel and harvest season wrap up.

Meanwhile, Reuters sources have warned that Russia could face a physical gasoline shortage in August–September (some regions already have), raising the risk of a repeat of the fuel crises of 2021 and 2023. That could push smaller market players toward bankruptcy, since independent gas stations are the first to lose profitability when supplies run short.

If prices continue to rise, the government’s options are limited. According to The Bell, possible measures include banning exports even to friendly countries (at the cost of political fallout), raising the minimum quota for exchange-traded gasoline sales (currently 15 percent, with talk of increasing it to 17 percent), or letting Belarusian fuel into the Russian market.