President Vladimir Putin signed amendments to Russia’s Tax Code on 4 July, introducing a package of measures designed to increase the supply of motor fuel to the domestic market. The most immediate change is the extension of the damping mechanism—a state compensation scheme that cushions oil companies against the gap between export and capped domestic prices—to gasoline produced by blending straight-run naphtha with other components, and to imports. For fuel brought in from Eurasian Economic Union (EAEU) countries, the compensation coefficient rises from 0.68 to 0.9, retroactive to 1 June 2026. For non-EAEU imports, the payout will be calculated using an import parity price based on Indian AI-92 quotations plus freight from Indian ports, a formula to be determined by the Federal Antimonopoly Service.

The law also reclassifies the blending of straight-run gasoline into high-octane fuel as a production activity, making it subject to excise duty but allowing certified refiners to claim a deduction. This creates a fiscal pathway for a practice that had previously operated in a grey zone. In parallel, the government gains the authority to define which fuel grades may circulate in Russia, a power exercised days earlier when it permitted the sale of Euro-3 standard gasoline and diesel—higher in sulphur than the usual Euro-5—until the end of the year. The legislation further extends the deadline for refinery modernisation agreements to 31 December 2026 and raises the minimum investment threshold from 60 billion to 100 billion roubles, giving large plants more time to complete upgrades.

Viewed from Moscow, the amendments are a direct response to a fuel supply squeeze that has seen restrictions on retail sales imposed in dozens of regions, including the capital and St. Petersburg. By late June, around 90 percent of regions were reporting disruptions, according to Bloomberg. The Kremlin has linked the shortages to Ukrainian strikes on civilian energy infrastructure, and on 28 June Putin convened a meeting with ministers and oil executives, calling for the impact of “terrorist attacks” to be minimised. Deputy Prime Minister Alexander Novak described the situation as tense but controllable, and ordered companies to boost deliveries, particularly to remote areas dependent on seasonal logistics.

The provisions on additional fuel supply apply to legal relations arising from 1 June 2026, while the refinery modernisation clauses are backdated to 1 January. The government will now compile a list of organisations authorised to import gasoline with damping rights. The next factual milestone is the entry into force of the new norms on 4 July 2026, and the market’s response as the summer driving season tests whether the blend-and-import incentives can ease the persistent regional deficits.