ST PETERSBURG, RUSSIA – 2022/04/10: Lukoil logo seen outside a petrol station in St. Petersburg, Russia. (Photo by Maksim Konstantinov/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Russia’s fuel crisis is worsening, and officials are no longer able to conceal the scale of the problem. The Federal Antimonopoly Service has begun issuing warnings to gas station operators across the country over what it calls unjustified price hikes, according to the Russian outlet Izvestia. Fuel prices have risen 40–50% since the start of the year, adding fresh inflationary pressure on the public.
With gas prices surging, many Russian gas station owners risk going out of business. On September 24, Kommersant reported that roughly 50% of stations in occupied Crimea and Sevastopol had stopped selling gasoline amid severe supply disruptions.
Russian Gas Stations Buckle Under Pressure From Ukrainian War
The Russian Fuel Union warned that gas station profitability has turned negative, with wholesale prices in some regions matching or exceeding retail. Shipment delays of up to two months are draining capital and forcing closures among independent operators, who run about 60% of Russia’s stations, Pravda reported.
The Russian economist Vladislav Inozemtsev said in an op-ed published by the Dutch media nonprofit Platform RAAM that Ukraine has “hit the nail on the head” by targeting refineries, creating the most complex fuel crisis Russia has faced in years. He estimates that more than 300 independent fuel retailers have been forced to shut down since May.
Data from the analytics firm Ciala highlights the scale of the crisis. By the end of September, nearly 38% of Russia’s refining capacity, or about 338,000 tons of crude per day, was offline. Around 70% of these outages were caused by Ukrainian drone strikes, which knocked out roughly a quarter of Russia’s total refining capacity, equal to 236,000 tons per day.
One Ukrainian officer told The Atlantic that the strikes deliberately focus on oil infrastructure because “Russia can sustain extremely high levels of casualties and losses in human lives. They don’t care about people’s lives. It is painful for them to lose money.”
Gas Shortages Spread Across Russia
According to Reuters, the occupation authorities in Crimea have frozen fuel prices for 30 days and limited motorists to 30 liters per fill-up as shortages worsen after Ukrainian drone strikes on Russian refineries. Moscow has already banned gasoline exports and is preparing diesel restrictions, but supply problems are spreading to cities like Nizhny Novgorod despite officials trying to assure the public that everything is fine.
Fuel shortages have spread to more than 20 Russian regions, Ukrainska Pravda reported. On October 1, Moskovsky Komsomolets published descriptions of how drivers in Khabarovsk Krai are spending nights in line at gas stations, with the paper warning that the crisis is severely disrupting transportation infrastructure and daily life in the Far East.
In a video posted to X by Anton Geraschenko, the Russian commentator admitted “that the situation is deteriorating. The fuel crisis is developing now. The voices of those who say that they have to switch to rationed consumption using coupons, basically fuel cards, are becoming louder and louder.”
Russia Scrambles With Quick Fixes For The Fuel Crisis
The Kremlin is also scrambling to ease the crisis with emergency measures. According to Kommersant, Deputy Prime Minister Alexander Novak has outlined plans to waive import duties on gasoline from China, South Korea, and Singapore, and to temporarily reintroduce an octane-boosting additive, which has been banned since 2016, to stretch domestic supplies.
Russian officials hope these steps, along with higher imports from Belarus, could add hundreds of thousands of tons of gasoline and diesel to the market each month. Russian gasoline purchases from Belarus are already up 36% year on year. On October 1, Deputy Prime Minister Alexander Novak insisted in a press statement that the domestic supply situation was “under control.”
The Moscow Times reported that the Finance Ministry has proposed raising the value-added tax from 20% to 22% starting next year, a move expected to generate 1.3 trillion rubles ($15.5 billion) annually. The proposal comes as the federal budget deficit hit 4.88 trillion rubles ($61.1 billion) between January and July, which already exceeds the government’s full-year target.
While these measures may offer short-term relief, Russia faces deeper structural challenges. Oil output is declining as sanctions, war, and aging fields take their toll, and by 2030 most reserves may be costly and difficult to extract, threatening the revenues that sustain the Kremlin’s war economy, according to the Wall Street Journal. Luke Coffey, a senior fellow at the Hudson Institute, told me in an interview that “Russia’s oil exports remain its economic lifeline.”
The sustained pressure from Ukrainian drone strikes is creating mounting economic strain on Moscow. While unlikely to end the war outright, it is making it harder for Russian President Vladimir Putin to convince Russians that the fight is worth continuing with little to show on the battlefield, even as ordinary citizens struggle to find fuel.
