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Russia is expecting a significant increase in gasoline and diesel prices, as the Kremlin plans to abandon the linking of retail fuel prices to consumer inflation and switch to a composite pricing index. This was reported by the Foreign Intelligence Service of Ukraine. According to the SVR, the Putin regime decided to introduce this innovation for several reasons. First, many Russian energy facilities failed in 2025. Second, there is a gap between market retail prices and retail prices, which are maintained at roughly the same level by administrative means. Third, there are Western economic sanctions in place.
Once Russian authorities stop linking retail fuel prices to consumer inflation, gasoline and diesel prices will begin to increase significantly. Until now, gasoline prices in Russia should not rise faster than inflation, at least according to unofficial Kremlin directives. Experts predict that gasoline prices in Russia will increase by approximately 15% over the next two years, perhaps even more. It’s worth noting that in 2025, Russia was gripped by a serious fuel crisis. This was exacerbated by strikes by the Ukrainian Armed Forces on refineries supplying fuel to the Russian occupation army in Ukraine. Furthermore, Russian refineries are backward in technology and production structure. Matters reached the point that in September, the Kremlin banned gasoline exports. Russia is forced to sharply increase its gasoline purchases from Belarusian companies. According to media reports, sales of gasoline from Belarus at the St. Petersburg International Mercantile Exchange increased by almost 50% in October of this year. This trend continues in November.
Recall, since early August 2025, Ukraine has been conducting a long-range bombing campaign targeting the oil and gas industry infrastructure that fuels the Russian war economy. This air offensive has proved highly successful, leading to reduced export revenues and gasoline shortages across Russia. However, while what many Ukrainians refer to as “drone sanctions” are clearly adding to the Kremlin’s economic woes, this is unlikely to spark any kind of meaningful domestic Russian opposition to the ongoing invasion of Ukraine.
While the Kremlin is understandably eager to conceal the scale of the damage caused by Ukraine’s energy sector attacks, there can be little question that the strikes conducted in recent months are bringing Putin’s invasion home to ordinary Russians. In early October, the Paris-based International Energy Agency downgraded its outlook for Russia and assessed that the impact from Ukrainian drone strikes will suppress Russia’s refinery processing rates until at least mid-2026. Meanwhile, car owners across Russia are being forced to queue for gasoline amid supply issues not witnessed since the dark days of the early 1990s.
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