Russian Government may regulate petrochemicals market

12-Jul-11

Russia is today one of the largest crude oil producers in the world, yet it faces a shortage of petrochemicals on the domestic market. Russia refines less than half of the 500 mln tons it produces, processed to make fuel oil, as per RIA Novosti. Domestic supply shortages are absurd in a country that is the world’s largest oil producer, Prime Minister Vladimir Putin said. He actually accused Russian oil companies of squandering funds allocated to refinery modernization and said the government may have to resume regulation of the industry, forcing companies to sell everything they produce domestically. Promises by the oil companies to repair and modernize their refineries have not been kept, possibly resulting in major budget shortfalls. This has led to a very low market stability margin. Any accident at a refinery or an unscheduled stoppage destabilizes the situation and causes shortages and surges in price, as was the case when the TNK-BP refinery began unscheduled repairs,” the prime minister said.