Russian refineries cut production due to unprofitability, some threatened with closure – Reuters

At least three Russian refineries have been forced to halt processing or cut production due to heavy losses amid export restrictions, rising raw material prices and high borrowing costs. This is reported by Reuters, writes UNN.

Details

According to the publication, large losses are caused by restrictions on exports, rising prices for raw materials and high interest rates on loans. In particular, the Tuapsyn, Ilsky, and Novoshakhtyn factories stopped or reduced their production capacity.

Russia’s oil refining industry is currently facing serious challenges, including Ukraine’s drone attacks, Western sanctions that force it to sell products at a discount, and rising raw material costs. This crisis reduces the volume of fuel exports, reduces the incomes of companies and reduces revenues to the state budget.

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The situation was also influenced by a 60% drop in world diesel prices and an increase in the key rate by the Central Bank of Russia to 21%. This creates additional difficulties for independent refineries that do not have the support of large corporations.

It is noted that at less modernized refineries, losses can reach 10 thousand rubles ($102) per ton, while more powerful plants operate with a low level of profitability. The Tuapsin Refinery, one of the largest in Russia, also suspended operations due to weak financial indicators.

Experts predict that some factories may stop working already at the beginning of next year, if the situation does not change. Small independent refineries have appealed to the government for support, asking for additional subsidies, but have so far received no response.

The Ministry of Energy of the Russian Federation and the management of the largest oil refining companies refuse to comment.

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