russia on the Verge of a Fuel Crisis: Domestic Oil Supplies Declining, Refineries Reducing the Load

russia’s economy may face a new blow. Amid the falling global oil prices, Western sanctions and Ukrainian attacks, the kremlin is urgently convening a meeting due to an alarming decline in the transportation of oil products within the country. The government of the rf is concerned about a possible shortage of fuel on the domestic market, particularly during the sowing season, critical for the agricultural sector.

The decrease in domestic fuel supplies is the result of a decline in the profitability of oil refineries, a key element of russia’s energy chain. The decrease in domestic oil transportation is due to:

1. Increase in tariffs for oil pumping – since January 1, 2025, they have increased by 9.9 %, which directly affected the margins of the domestic market.

2. Increase in excise taxes: AI-95 petrol has risen to $212.8 per ton, diesel – to $150.9. This has made the domestic market less attractive for producers, who are increasingly focusing on exports or cutting production.

3. Reduction of  damper payments aimed at keeping domestic fuel prices. In the first four months of 2025, the volume of these subsidies decreased more than 2.5 times – from $1.9 billion in January to $780 million in April. This means that the government support for oil refiners is rapidly weakening.

4. Logistical difficulties: a shortage of rolling stock and a decrease in the priority of oil transportation by russian railways. More than 60 % of fuel is transported by railway and road rather than pipelines, which puts additional strain on critical infrastructure.

The decline in fuel supplies is not only an energy problem, but also a signal of systemic destabilization of russia’s economy. The industrial sector, farmers, and logistics may find themselves in a fuel famine, leading to an inflationary surge and social discontent.

As of May 2025, a number of refineries are already reducing the load, and further deepening of the crisis could lead to temporary or permanent closure of enterprises. The energy crisis in russia amid budgetary depletion is no longer a future scenario, but a risk that is rapidly materializing.

If the current dynamics continues, moscow may face the most serious systemic challenge to the energy vertical since the collapse of the ussr. Combined with sanctions pressure, loss of markets, and military spending, this creates real preconditions for the collapse of the key pillar of the russian economy – the oil and gas sector.