Fuel Crisis Rocks Russia

Russia, the world’s largest oil producer,
is facing domestic fuel shortages after the authorities restricted the
transport of crude oil by rail, forcing several refiners to cut production,
sources said

The move had taken thousands of tonnes of
oil products off the market in recent days, threatening a repeat of 2011 fuel
shortages, following Russian leader Vladimir Putin’s order to oil companies to
curb pump prices.

Russia’s transportation safety watchdog had
banned the use of rail wagons designed to handle light oil products to ship
crude and heavy fuel oil following several rail accidents.

A producer, Orsknefteorgsintez, said its
heavy oil shipments slumped by almost a half.

“We will only be able to function for 10
days in this mode,” “we hope the situation will be resolved by then,  a company representative said.

The Khabarovsk refinery, operated by
Alliance , said it had reduced output by half following the ban.

“As a result, oil refinery declined from
11,200 to 11,300 tonnes per day to 5,100,” a spokesman said.

Representatives of several other refineries
had expressed concerns over the ban.

A spokesman for Rosneft, Russia’s largest
crude producer, said that the company had written to Transportation Minister,
Igor Levitin to postpone the ban until              August 1.

The spokesman declined to comment on
possible refinery problems.