Gasoline prices in Russia have soared by 18%. This is increasing inflationary pressure on its economy

Gasoline prices are rising rapidly in Russia, with retail prices up 18% over the past year. Prices are expected to rise by at least another 8% by the end of 2025, the Foreign Intelligence Service reported.

The increase in fuel costs could be a new impetus for further increases in consumer prices in the country, as gasoline directly affects the cost of transportation, production, and retail trade.

Among the main reasons for the increase in prices are:

• delayed inflationary effect – 9.5% in 2024 and already 10.2% in just the first four months of this year;
• increase in excise duties on fuel – by 4%;
• reducing government subsidies for oil companies;
• increase in Transneft tariffs for oil transportation – up to 10%.

In addition, Russia has almost halved its seaborne gasoline exports, falling to 130,000 tons in May, a 47% drop from last year.

Against the backdrop of sanctions pressure and declining revenues, another increase in gasoline prices only increases inflationary pressure on the Russian economy.

• In April, it was reported that Russia had worsened its export forecasts and lowered its oil price expectations for 2025.