The State Duma Approves Amendments to Stimulate the Fuel Market in Russia

The State Duma has approved amendments to the Tax Code in the second and third readings aimed at supporting oil refining. Authorities will increase payments under the import dampener, with the Indian market serving as a reference point for compensation calculations. On Wednesday, the State Duma approved amendments to the Tax Code that are intended to stimulate the provision of gasoline to the domestic market of Russia and support oil refineries (REFs) affected by attacks from Ukrainian drones. The corresponding document was published on the website of the lower house of parliament.

Incentives are created for gasoline supplies to Russia from EAEU countries and beyond through increased payments for the import dampener;
The possibility is established for companies to accrue a dampener for gasoline produced by blending straight-run gasoline with other components;
The terms for modernization agreements for large REFs are extended.

All changes related to additional fuel provision for the domestic market will apply to relationships arising from June 1, 2026, and for modernization of oil refineries from January 1, 2026. The day before, on June 23, this bill was approved by the State Duma Budget and Tax Committee.

The State Duma Committee supported measures to stimulate the fuel market in Russia
Economics

The fuel market has been under increased scrutiny since spring. Since May, the Federal Antimonopoly Service (FAS) has been advising oil company executives to adhere to responsible pricing principles for petroleum products (the latest such communication was reported on June 24). At the same time, the Ministry of Energy stated that the situation in the domestic fuel market remains stable and controllable. The Kremlin also did not see risks in providing regions with fuel. However, a number of regions and oil companies have had to introduce restrictions on fuel supply volumes at gas stations. On June 24, Rosstat reported that the index of petroleum product production in Russia (a component of the overall industrial production index) decreased by 13.5% in May 2026 compared to May 2025. In April, the annual decrease was 9.1%. For the month (compared to April 2026), petroleum product production decreased by 2.3%. As a result, the indicator fell by 4.9% during January to May compared to the same period last year.

Why the dampener mechanism is necessary

The essence of the fuel dampener is that by providing subsidies to REF, the government motivates oil producers to supply more gasoline and diesel to the domestic market rather than for export. If selling fuel abroad is more profitable than within the country, the government uses the dampener to compensate oil companies for the difference with exports, thereby stabilizing price dynamics. However, if domestic fuel prices exceed certain values, dampener payments are nullified. Nullification occurs during sharp price fluctuations. According to the Tax Code, if wholesale (exchange) prices for fuel deviate from the established indicative prices by more than 20% for gasoline and 30% for diesel over the average month, the dampener for that month is not paid. For 2026, 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's data. Year-on-year growth accelerated to 12.9%, compared to 12.3% a month earlier. According to the agency's statistics, gasoline has increased by 4.6% since the beginning of the year. The average consumer price of gasoline in Russia at the end of May reached 67.7 rubles per liter. 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.

Increasing subsidies for imports

The mechanism for obtaining a dampener for processing Russian oil abroad followed by importing produced fuel into Russia was legislatively established back in November 2025. After that, toll processing of Russian oil abroad became economically comparable to processing within the country. Until now, the tool was mainly aimed at supplies from Belarus. Now, authorities are considerably expanding its scope and the size of payments. RBC reported on June 1 regarding the corresponding order from Deputy Prime Minister Alexander Novak. The amendments provide for the possibility of receiving a dampener when importing gasoline by organizations authorized by the government. For fuel produced in EAEU countries, the CAB_COMP coefficient (one of the parameters for calculating the dampener compensation for automotive gasoline) will be 0.85 in 2026 and then decrease to 0.33 in 2027. "Currently, coefficients of 0.68 (for gasoline) and 0.65 (for diesel) are used, and the introduction of an elevated coefficient of 0.85 for gasoline importers effectively means subsidizing the import of fuel from afar," explains Sergei Tereshkin, the director of the Open Oil Market petroleum marketplace. For gasoline produced outside the EAEU, a separate compensation calculation mechanism will be introduced. It will be determined based on the import parity price, which is formed from the indicative price of AI-92 gasoline on the Indian market and the cost of delivery from Indian ports to Russia. This indicator will be determined by the Federal Antimonopoly Service (FAS). Experts interviewed by RBC note that the new rules do not mean an automatic start to fuel supplies from India, but they create economic conditions for importing gasoline from abroad if necessary. Choosing the Indian market as a benchmark indirectly indicates that Russia will import petroleum products from India, which has become one of the largest importers of Russian oil after 2022, according to independent energy expert Kirill Rodionov. In his opinion, importing fuel from abroad is quite probable since Belarus, which began to increase fuel supplies to Russia in 2024, is limited in the scale of its own refining capacities. Another potential supplier of petroleum products among the EAEU countries could be Kazakhstan, although the country is not yet capable of rapidly increasing exports. Significant volumes of Kazakh fuel supplies will only become possible after the commissioning of the fourth large-tonnage REF with a design capacity of up to 10 million tons of fuel per year, according to Rodionov. A decision on investment in this project is expected by the end of the current year. On June 24, the Reuters agency reported negotiations between Russia and Kazakhstan, but sources assured that Moscow and Astana are only discussing the import of about 50,000 tons of AI-92 gasoline. The Kazakh side previously denied receiving such a request. At the same time, India is not the only potential fuel supplier to Russia, says Dmitry Kasatkin, managing partner of Kasatkin Consulting. "The Indian market has been chosen because it is one of the largest centers for refining and trading petroleum products outside the Western framework and is actively working with Russian oil. The indicative is not so much seen as an indicator of the only physical source of supply but rather as a calculation basis for an external alternative price," he explains. Tereshkin agrees with him, adding that calculations for parity are typically made considering transportation costs, which in the case of India are significantly higher than for the Dutch hub of Rotterdam, which had been considered for dampener calculations until recently. Another contender for supplying fuel to Russia, according to Tereshkin, is China. In recent years, new refining capacities have been introduced in the country alongside the electrification of passenger and gasification of freight transport. Therefore, the country may free up excess fuel volumes in the future. Analysts believe that stimulating fuel imports will help saturate the market during a crisis, but the scale of the effect will still depend on the speed of recovery of Russian plants, the absence of logistics problems, and the control of fuel distribution across regions. Kasatkin considers the import dampener to be a temporary safety measure. When the operations of Russian REFs stabilize and fuel stocks recover, the need for them should decrease; otherwise, the mechanism will begin to distort the economics of domestic processing. Additional questions arise regarding the very methodology for calculating compensations. As noted by Vladislav Gates, a senior lawyer at Rustam Kurmaev and Partners, the dampener for gasoline outside the EAEU becomes a function of import parity, calculated by the FAS from the indicative Indian price and the cost of delivery from Indian ports. "In other words, a significant element of the tax deduction is determined not by law but by the methodology of one regulator, which directly affects 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, and any indeterminacy should be construed in their favor," he explains. According to Gates, as long as the FAS methodology is not published and tried, importers will not be able to model the size of payments, thereby increasing the likelihood of disputes over the correctness of the indicator itself.

How authorities intend to quickly increase gasoline output

Another major innovation in the Tax Code concerns the production of gasoline by blending straight-run gasoline with other components. The amendments allow it to be included in the overall volume of produced gasoline and to receive a dampener for it, as well as not to include excise duties in the cost of straight-run gasoline used for blending. Companies are given three months to collect documentation proving that high-octane gasoline was produced from straight-run gasoline through blending. According to Kasatkin, allowing gasoline produced by blending straight-run gasoline with other components will be an important support for the market during periods of high seasonal demand and unplanned repairs of REFs. This technology is widely used in the industry and does not create problems for vehicles. However, this mechanism may raise questions regarding the control over the origin of components and the quality of the final product. Strict laboratory accounting, digital traceability of batches, matching the volumes of raw materials and finished fuel, and selective independent inspections will be required. The primary legal risk lies in the fiscal plane, Gates adds. The excise deduction on straight-run gasoline makes the registration of "paper" blending without actual high-octane gasoline production attractive for obtaining the deduction. Oleg Abele, head of the analysis department at investment company Rikom-Trast, reminds that some control tools already exist. "There are GOST standards that define methods for controlling fuel compatibility during blending. However, crucial is the governmental oversight by Rosprirodnadzor and Rosstandart to ensure the volume of substandard fuel does not increase," the expert believes. For the scheme to work as a stimulus, strict control at all stages is critically important, adds Vasily Kutin, director of analytics at Ingosstrakh Bank. It is essential to ensure that the company is indeed producing high-octane gasoline and not abusing the mechanism. That is why the amendments state that companies are given three months to confirm that high-octane gasoline has been produced from straight-run gasoline to receive the excise deduction. Additionally, a rule has been introduced: if a buyer returns such gasoline, the paid excise will not be reimbursed. "But it is clear that it is impossible to completely eliminate human factors or technical failures in control, so oversight remains an important element," he concluded.

Why authorities are extending REF modernization

Another set of amendments pertains to oil refineries investing over 100 billion rubles in modernization. For them, the term of modernization agreements between oil companies and the government is extended until December 31, 2026. Earlier, it was expected that the agreements, which notably include tax benefits for investors, would expire in January this year. This is not about a new benefit, but about an attempt to preserve already initiated investment projects that have been threatened due to external factors, experts explain. "Large projects at REFs have objectively shifted timelines due to equipment supply restrictions, the import substitution of technological solutions, increased project costs, and unplanned repairs after infrastructure attacks," says Kasatkin. According to him, the government aims to maintain the investment cycle in oil refining. Abele adds that the deferral will allow companies to retain their right to tax benefits when some refining capacities are halted due to unplanned repairs. This is expected to enable the completion of deep processing projects and increase the output of light petroleum products, thereby reducing market dependence on emergency anti-crisis decisions. However, experts agree that the current package of measures can only temporarily alleviate tension in the market. "Regulators use the tools available here and now. These measures will lead to an increase in subsidies for the industry and may somewhat calm the market, but globally will not change the situation, as everything depends on the supply dynamics at REFs," concludes Tereshkin. Source: RBC