The Russian government is considering giving priority to oil and gas on its railway network in its Far Eastern region. Earlier, Russian oil and gas companies reported regular refusals for transportation of their products from rail operators. As oil and gas are essential commodities for Russia’s economy, the government is now considering giving them priority in transportation.
Affected Russian companies expressed fears that the increasingly limited possibilities for transportation of oil and gas would negatively impact their production programmes. Now, the Russian energy ministry is reportedly considering amending rules on the priority of freight on the Russian rail network towards its Far East. Russian media report that the ministry may prioritise oil and liquified gas transportation in order to guarantee timely transportation from refineries.
The oil transported to Russia’s Far East is not meant for international exports. Russia has recently introduced an export ban on petroleum products to curb price hikes and limited production capacity after Ukrainian strikes on refineries. Even though Russia’s Far East has its own refineries, about a third of all consumed oil in the region is imported from far-away regions.
Logistical issues
The need for a reprioritisation on the Russian rail network comes amid logistical problems following Western sanctions. Russia found itself forced to reorient its exports towards China, leading to increased demand for rolling stock. Moreover, a shortage of foreign spare parts has caused a locomotive shortage. Russian media state that the new priority rules are certain to reduce the capacity of other shippers to transport their products.
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