Three Russian refineries cut back or stop production due to significant financial losses. The losses are caused by export restrictions, high raw material prices and lending rates.
At least three Russian oil refineries have been forced to stop processing or cut production due to significant losses amid export restrictions, rising raw material costs and high borrowing costs. This was reported by Reuters, according to UNN.
Details
According to the publication, the large losses were caused by export restrictions, rising raw material prices, and high interest rates on loans. In particular, the Tuapse, Ilyich and Novoshakhtyn plants have stopped or reduced their production capacity.
Russia's oil refining industry is currently facing serious challenges, including Ukrainian drone attacks, Western sanctions that force it to sell products at a discount, and rising raw material costs. This crisis is reducing fuel exports, cutting company revenues, and lowering state budget revenues.
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The situation was also affected by a 60% drop in global diesel prices and the Central Bank of Russia's key rate hike 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 low profitability. The Tuapse refinery, one of the largest in Russia, also suspended operations due to weak financial performance.
Experts predict that some refineries may shut down early next year if the situation does not change. Smaller independent refineries have appealed to the government for support, asking for additional subsidies, but have not yet received a response.
The Russian Ministry of Energy and the management of the largest oil refiners refuse to comment.
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