Russia’s State Duma passes law extending fuel price dampener to diesel imports, subsidizing importers to keep prices in check

Russia’s State Duma passed a law in its second and third readings extending the fuel price dampener mechanism to diesel imports. Oil companies will receive federal budget compensation for the gap between export prices and domestic market prices — a mechanism previously adopted for gasoline imports.

The law sets special terms for diesel imports from Belarus, raising the compensation coefficient for those deliveries to 0.9.

The dampener will apply when export bans on Russian diesel are in effect.

Russian Energy Minister Sergei Tsivilev had said the measure would allow additional fuel volumes to be brought in quickly from abroad when needed, while keeping those deliveries economically viable.

The same law allows fuel volumes that authorized suppliers purchase from refineries under direct contracts to count toward exchange quotas. Vertically integrated companies — those that extract raw materials, produce fuel, and sell it at retail — are required to sell gasoline and diesel on the exchange; failing to meet those requirements zeroes out the excise rate on petroleum feedstock. Once the law takes effect, these companies will be able to direct less fuel to exchange trading.

State Duma Speaker Vyacheslav Volodin said the law was necessary to ensure an uninterrupted supply of fuel and lubricants. “Fuel must be available at the front, in the rear, during the harvest campaign, and for emergency services,” he said.