Russia is currently grappling with a major gasoline shortage that experts warn could trigger a spike in inflation, weaken consumer purchasing power, and devalue the ruble in the medium to long term.
According to the Institute for the Study of War (ISW), recent Ukrainian strikes on oil refineries have disrupted at least 17% of Russia’s refining capacity around 1.1 million barrels per day. This has pushed up fuel prices across both Russia and occupied territories. Analysts believe the knock-on effects will drive up costs for businesses and households alike, fueling inflation expectations and adding more pressure on an already fragile economy.
The crisis has been compounded by the Russian Central Bank’s decision to lower interest rates on July 25. While intended to stabilize the economy, experts argue the move was premature, as it came after only a temporary slowdown in inflation. Combined with higher fuel prices, this policy shift is expected to create long-term instability.
The ISW highlighted three critical risks:
- Inflation surge: Rising petrol prices will feed directly and indirectly into consumer goods and services.
- Weaker purchasing power: Households will feel the squeeze as wages lag behind price increases.
- Ruble devaluation: Sustained military spending and domestic fuel shortages could erode confidence in the currency.
Reports also show that premium gasoline shortages have already hit southern Russia, the Far East, Crimea, and occupied Ukrainian regions. Some areas have introduced fuel rationing at petrol stations, and authorities in the Kuril Islands and Sakhalin Oblast even suspended the sale of A-92 gasoline.
Interestingly, Russia has tried to offset refinery disruptions by increasing crude exports by 200,000 barrels per day in August. While this boosts short-term revenue, analysts warn it “adversely affects” the domestic market by tightening local supply.
This isn’t the first time Russia has struggled with internal fuel demand. Since 2022, the government has occasionally imposed export bans to keep domestic prices in check. But with the war in Ukraine escalating and refineries under repeated attack, the pressure on the Russian economy is mounting.
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