- Incentives are created for gasoline imports from EAEU countries and beyond by increasing payments under the import price stabilization mechanism;
- Companies are allowed to receive stabilization payments for gasoline produced by blending straight-run gasoline with other components;
- The duration of modernization agreements for large oil refineries is extended.
All changes related to additional fuel supply for the domestic market will apply to relationships established from June 1, 2026, and for the modernization of oil refineries from January 1, 2026.
The day before, on June 23, this bill was approved by the State Duma's budget and tax committee.
Economics
The fuel market has been under increased scrutiny since spring. Since May, the Federal Antimonopoly Service (FAS) has been advising the heads of oil companies to adhere to responsible pricing principles for petroleum products (the agency reported on another such letter on June 24). Meanwhile, the Ministry of Energy stated that the situation in the internal fuel market remains stable and controlled. The Kremlin has also seen no risks regarding fuel supply to the regions.
Nevertheless, several regions and oil companies have been forced to impose restrictions on fuel supply volumes at gas stations. On June 24, Rosstat reported that the production index of petroleum products in Russia (a component of the overall industrial production index) in May 2026 decreased by 13.5% compared to May 2025. In April, the annual decline was 9.1%. Over the month (compared to April 2026), petroleum product production fell by 2.3%. Consequently, from January to May, the index dropped by 4.9% compared to the same period last year.
Why the Price Stabilization Mechanism is Necessary
The essence of the fuel price stabilization mechanism is that the government incentivizes oil companies to supply more gasoline and diesel fuel to the domestic market rather than for export by providing subsidies to refineries. If selling fuel abroad is more profitable than selling it domestically, the government compensates oil companies for the difference through the stabilization mechanism, thereby stabilizing price dynamics. However, if domestic fuel prices exceed certain thresholds, the stabilization payments are nullified.
Nullification occurs during sharp price fluctuations. According to the Tax Code, if wholesale (exchange) prices for fuel deviate from established indicative prices by more than 20% for gasoline and 30% for diesel fuel over an average month, the stabilization payment for that month is not disbursed. For 2026, the indicative prices are set at 62,300 rubles per ton for AI-92 gasoline and 58,950 rubles per ton for diesel fuel.
Gasoline prices in Russia rose by 0.9% in May compared to April, according to Rosstat data. Annually, the growth accelerated to 12.9% from 12.3% the previous month. According to the agency's statistics, gasoline prices increased by 4.6% since the beginning of the year. The average consumer price for gasoline in Russia reached 67.7 rubles per liter by the end of May. The cost of AI-92 gasoline was 64.04 rubles, AI-95 — 69.65 rubles, and AI-98 and above — 94.25 rubles per liter.
Why Subsidies for Imports are Being Increased
The mechanism for obtaining stabilization payments when processing Russian oil abroad, followed by the import of the manufactured fuel into Russia, was conceptually established legislatively back in November 2025. After that, contract processing of Russian oil abroad became economically comparable to domestic processing. Previously, this instrument was effectively aimed only at supplies from Belarus. Authorities are now significantly expanding the scope of its application, as well as the amount of payments. The relevant order from Deputy Prime Minister Alexander Novak was reported by RBC on June 1.
The amendments cement the possibility of receiving stabilization payments for gasoline imports by organizations authorized by the government. For fuel produced in EAEU countries, the CAB_COMP coefficient (one of the parameters for calculating stabilization compensation for motor gasoline) will be set at 0.85 in 2026, and subsequently reduced to 0.33 in 2027. “Currently, coefficients of 0.68 (for gasoline) and 0.65 (for diesel) are used, and the introduction of an increased coefficient of 0.85 for gasoline importers effectively means subsidizing the import of fuel from distant foreign countries,” explains Sergey Tereshkin, CEO of the petroleum products marketplace Open Oil Market.
For gasoline produced outside the EAEU, a separate compensation calculation mechanism will be introduced. It will be determined based on the import price parity, which is established from the indicative price of AI-92 gasoline in the Indian market and the cost of delivery from Indian ports to Russia. This figure will be determined by the Federal Antimonopoly Service (FAS).
Experts surveyed by RBC note that the new rules do not mean an automatic start to fuel supplies from India, but they create economic conditions for gasoline imports from distant foreign countries if necessary.
Choosing the Indian market as a reference indirectly suggests that Russia may import petroleum products from India, which, in turn, has become one of the largest importers of Russian oil since 2022, believes independent energy expert Kirill Rodionov. In his opinion, the import of fuel from distant foreign countries is quite expected, as Belarus, which started ramping up fuel supplies to Russia since 2024, is restricted by the scale of its own refining capacities.
Another potential supplier of petroleum products among EAEU countries could be Kazakhstan, but the country is currently unable to sharply increase exports. Significant volumes of Kazakh fuel supplies will only become possible after the commissioning of a fourth large-tonnage refinery with a design capacity of up to 10 million tons of fuel per year, Rodionov believes. The investment decision for this project is expected by the end of the current year. The day before, on June 24, the agency Reuters, citing sources, reported on negotiations between Russia and Kazakhstan. However, the agency’s sources assert that Moscow and Astana are discussing importing just around 50,000 tons of AI-92 gasoline from Kazakhstan. Meanwhile, the Kazakh side earlier denied having received such a request.
However, India is not the only potential fuel supplier to Russia, says Dmitry Kasatkin, managing partner of Kasatkin Consulting. “The Indian market was chosen because it is one of the largest centers for processing and trading petroleum products outside the Western sphere, and is also actively engaged with Russian oil. The indicative is not used so much as an indication of the sole physical source of supply, but rather as a calculation basis for external alternative pricing,” he explains.
Tereshkin agrees with this view. He also adds that parity calculation is generally carried out, taking into account transportation costs, which in the case of India are significantly higher than for the Dutch hub of Rotterdam, which had been considered in the stabilization calculations until recently.
Another potential contender for fuel supplies to Russia is China, believes Tereshkin. There, in recent years, new refining capacities have come online alongside the electrification of passenger and gasification of freight transport. Therefore, in the future, there may be freed volumes of fuel in the country.
According to analysts, stimulating fuel imports will help saturate the market during the crisis period, but the scale of the effect will still depend on the speed of recovery of Russian refineries, the absence of logistic issues, and the control of fuel distribution across regions. Kasatkin believes that the import stabilization mechanism looks like a temporary safety measure. As the operations of Russian refineries stabilize and fuel reserves are restored, the need for it should diminish; otherwise, the mechanism will start distorting the economics of domestic refining.
Additional questions arise regarding the very calculation methodology for compensation. As noted by senior lawyer Vladislav Gates from the firm “Rustam Kurmaev and Partners,” the size of the stabilization payment for gasoline outside of the EAEU becomes a function of import parity, which the FAS calculates from the indicative Indian price and the cost of delivery from Indian ports. “Thus, a significant element of tax deduction is determined not by law but by the methodology of one regulator, directly impacting the principle of legal certainty: taxes and the conditions for their calculation should be formulated in such a way that the taxpayer understands the extent of their rights and obligations in advance, with any unresolvable doubts interpreted in their favor,” he explains.
According to Gates, until the FAS's methodology is published and tested, importers will be unable to model the size of the payments, increasing the likelihood of disputes regarding the accuracy of the indicator itself.
How Authorities Aim to Quickly Increase Gasoline Production
Another significant innovation in the Tax Code concerns gasoline production by blending straight-run gasoline with other components. The amendments allow for the inclusion of this in the total volume of produced gasoline and, consequently, for receiving stabilization payments, as well as excluding excise tax from the price of straight-run gasoline used for blending. Companies are given three months to gather documents confirming that high-octane gasoline has been produced from straight-run gasoline through blending.
According to Kasatkin, allowing the inclusion of gasoline produced through blending straight-run gasoline with other components will be an important support for the market during periods of high seasonal demand and unplanned refinery repairs. This technology is widely used in the industry and does not create problems for cars. However, this mechanism may raise questions regarding the control of the origins of components and the quality of the final product. Strict laboratory accounting, digital traceability of batches, matching input volumes of raw materials with finished fuel, and independent random inspections will be required.
The primary legal risk lies within the fiscal realm, Gates adds. The excise deduction for straight-run gasoline makes it attractive to formalize "paper" blending without real production of high-octane gasoline solely for the purpose of obtaining the deduction.
Ole Abeliev, head of the analytics department at investment company “Rikom-Trast,” reminds that some control tools already exist. “There are GOST standards that define control methods and compatibility of fuel during blending. But the key element is state control from the Rosprirodnadzor and Rosstandart to ensure that the volume of low-quality fuel does not increase,” the expert believes.
For the scheme to work as an incentive, strict control at all stages is critically important, adds Vasily Kutin, director of analytics at Ingo Bank. We need to ensure that the company actually produces high-octane gasoline and is not attempting to abuse the mechanism. Thus, the amendments stipulate that companies be given three months to confirm that high-octane gasoline has been produced from straight-run gasoline to qualify for the excise deduction. Additionally, a rule has been introduced: if the buyer returns such gasoline, the paid excise tax will not be refunded. “But it is clear that it is impossible to completely eliminate the human factor or technical failures in monitoring, so oversight remains an important element,” he concluded.
Why Authorities are Extending Refinery Modernization
Another block of amendments concerns oil refineries investing more than 100 billion rubles in modernization. For them, the operational period of modernization agreements with the government is extended until December 31, 2026. Previously, it was anticipated that these agreements, which primarily discuss tax incentives for investors, would expire in January of this year.
This is not about creating a new incentive, but an attempt to preserve already-launched investment projects that have come under threat due to external factors, experts explain. “Large projects at refineries have objectively shifted timelines due to equipment supply restrictions, technological solutions for import substitution, rising project costs, and unplanned repairs after attacks on infrastructure,” says Kasatkin. He adds that the government aims to maintain the investment cycle in oil refining.
Abeliev adds that the extension will allow companies to retain entitlement to tax incentives when part of refining capacity is halted due to unplanned repairs. It is expected that this will allow the completion of deep processing projects and increase the output of light petroleum products, thereby reducing the market's dependence on emergency crisis solutions.
However, experts agree that the current package of measures can only temporarily alleviate market pressure. “Regulators are using whatever tools are available right now. These measures will increase subsidies to the industry and may provide some relief to the market, but they will not fundamentally change the situation, as everything hinges on the supply dynamics at refineries,” concludes Tereshkin.
Source: RBC
