November 22, 2018 / 4:54 PM / 4 months ago

Russia considers fuel intervention fund to balance domestic supplies

MOSCOW (Reuters) - Russian authorities are considering the creation of a so-called fuel intervention fund which would help to balance the domestic oil products market in case of supply disruptions or price spikes, Kirill Molodtsov, an aide to the Kremlin chief of staff, said on Thursday.

Earlier this year, the Russian government and oil companies agreed to cut wholesale domestic fuel prices as a temporary measure aimed at stemming an unwanted increase in the cost of petrol and diesel, a politically sensitive issue for voters.

Petrol in Russia has become more expensive as the rouble remains weak while a global deal to curb oil production has led to a rise in the price of crude in U.S. dollar terms.

Russian authorities are keen to prevent fuel from becoming too costly because previous price spikes angered voters.

“Each market must have a safety cushion which may be used... I mean a sort of intervention... [supply] stocks,” Molodtsov told a conference.

He added that Transneft (TRNF_p.MM), the Russian state oil pipeline monopoly, has spare oil products storage capacity in its pipes which can be used for the fuel intervention fund. Molodtsov did not provide other details.

Reporting by Oksana Kobzeva; Writing by Katya Golubkova; Editing by Alexandra Hudson

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