Putin Delegates Fuel Crisis Response to Regional Heads
Putin Delegates Fuel Crisis Response to Regional Heads
Executive Summary:
- The majority of Russia’s federal subjects have experienced fuel shortages due to Ukrainian attacks on Russian oil infrastructure. Russian President Vladimir Putin has sought to downplay the severity of the deficits and has delegated crisis management to regional governors in an attempt to shield the Kremlin from public blame.
- The Kremlin has prevented governors from looking for available fuel on the open market, creating a system in which governors with connections in influential patronage networks are likely to receive more support from state oil companies than those with lower-level personal connections.
- The current fuel deficit will not lead to true open dissent from regional heads, as the Kremlin places more emphasis on the appearance of problem-solving than on good governance, greatly reducing the pressure on governors.
- With no true solutions to offer, federal authorities have largely chosen to hide from the public and hope fuel availability stabilizes by the September 18–20 State Duma elections—a reaction that only highlights the ever-present gap between Russia’s ruling elites and its people.
To date, at least 80 of Russia’s 89 federal subjects have experienced fuel shortages due to Ukrainian attacks on Russian oil infrastructure (Novaya Gazeta Evropa, July 9). [1] The shortages have directly impacted over 35 percent of the country’s population—at least 50 million people (Important Stories, July 9). Fuel deficits have also begun to threaten other sectors of Russia’s economy. For example, agricultural enterprises that depend on fuel for the harvest are raising warning signals. Officials in the Altai Republic have considered announcing a state of emergency, proclaiming that farm operations may need to be halted mid-harvest due to fuel shortages (The Moscow Times, July 14). A deputy from Irkutsk similarly warned that the current deficit threatens an agricultural collapse, saying that without an increase in fuel supplies, authorities should “prepare for the complete shutdown of the entire agriculture system of the Irkutsk oblast” (Novaya Gazeta, July 15). A leading farmer from Krasnodar krai predicts that if deficits do not improve, Russia could lose up to 30 percent of this year’s harvest (74.ru, July 7).
The federal response to the crisis has been muted and reactive. Russian President Vladimir Putin has sought to downplay the domestic consequences in his few public statements on the matter. In a June 28 interview with Russian journalist Pavel Zarubin, Putin acknowledged the shortages for the first time, but referred to them as “not critical” (Telegram/@zarubinreporter, June 28). On July 8, Putin chaired a governmental meeting, where he again downplayed the severity of the deficits, stating, “The margin of safety in Russia’s energy system is very high, one of the highest in the world.” He concluded the meeting with a vague instruction to keep him up to date on the issue, but took no further action (President of Russia, July 8). On July 13, Putin gave a speech at the Popular Front’s “Everything for Victory!” forum, where he only stated that the situation “will improve,” and that the Russian energy sector has “a very powerful, reliable basic foundation” (RIA Novosti, July 13). His most recent comments on the crisis came during a July 22 meeting on economic issues. During the meeting, Putin declared the deficits to be temporary, stressing that they “cannot affect the overall economic dynamics” (President of Russia, July 22).
Russian Prime Minister Mikhail Mishustin has been even less visible than Putin. Mishustin has yet to lay out the government’s strategy for solving the crisis, and has seemingly delegated responsibility for all federal communication about the shortages to Deputy Prime Minister Alexander Novak—a little-known career bureaucrat. Russia’s Federal State Statistics Service (Rosstat) noted an increase in gasoline prices by at least 13.93 percent since the start of the year, but has yet to provide official data on the extent of the shortages (DW, June 30; Interfax, July 8). Federal officials and big-business representatives are seemingly more concerned about Russia’s Central Bank raising interest rates amid the crisis than about coordinating a nationwide response to address it (RBC, July 13; Kommersant, July 14; Gazeta.ru, July 18).
Regional governors have therefore largely been left to address the shortages on their own. They are left to determine which policies to implement with little to no guidance from the center and remain the only sources of information about the consequences in their region. Under these circumstances, regional heads have begun borrowing policy ideas from one another rather than seeking support from Moscow.
In June, both Crimea and Sevastopol halted the open sale of gasoline. The regional governments then introduced a QR-code-based purchase system—allowing residents to purchase fuel only on days they receive an electronic code—and stored most reserves for state services (RIA Novosti Krym, June 7; Meduza, June 21). A similar system has spread to other regions, including Zabaikalsky krai and the Irkutsk, Penza, and Nizhny Novgorod oblasts (Telegram/@omelnichenko, June 30; Ekspert; TASS, July 10; Kommersant, July 15). Interactive maps with up-to-date information on fuel availability have now been launched in the Vologda, Murmansk, and Kaluga oblasts (Vesti.ru, June 24; Kommersant, July 3; TASS, July 7). Chatbots that provide information on fuel availability have been developed in the Republic of Karelia and Kemerovo oblast (Telegram/@ilyaseredyuk, July 7; MK.RU, July 8). On July 4, Oryol oblast introduced an even-odd license plate system, which allows fuel purchases only on alternate days (Komsomol’skaya Pravda, July 4). This system proved effective in managing demand and has since been introduced in at least ten other regions, including the Republic of Mordovia, Krasnodar krai, and Astrakhan, Pskov, Kursk, and Lipetsk oblasts (Kommersant; RG.ru; Komsomol’skaya Pravda, July 8; MK.ru; Interfax, July 10; RUinformer; Telegram/@Hinshtein, July 13). Other regions, including the Novosibirsk and Tomsk oblasts, have recommended businesses switch to online work to conserve fuel (Government of Novosibirsk oblast; Komersant, July 10).
The crisis has also highlighted the imbalance between vertically-integrated fuel companies and independent filling stations. Russia’s oil extraction, refining, and distribution processes are dominated by the former, particularly the state-owned companies Rosneft, Gazprom, and Transneft (The Insider, July 14). Independent gas stations lack their own production capabilities and thus purchase fuel from large state-owned companies (Ekspert, January 30; Kommersant, July 20). With refining and production levels down countrywide, however, state companies have largely prioritized providing fuel supplies for their own stations, rather than supplying independent networks (Kommersant, June 24; Aktual’nye Kommentarii, July 17).
With limited federal support, independent stations have been forced to raise prices and restrict sales to compensate for deficits. Russia’s Federal Antimonopoly Service (FAS), though, has targeted independent stations for doing so. In early July, FAS opened a case against six Moscow-based independent gas stations for simultaneously raising fuel prices (RBC, July 6). Russia’s largest independent gas station network, Neftmagistral, was forced to lower prices after a warning from FAS, and is now likely operating at a loss (Interfax, June 23). Limited fuel supplies and an inability to raise prices have made many gas stations unprofitable. Izvestiya has reported that over 150 gas stations have gone up for sale in the past month alone, with the majority of them being independent stations (Izvestiya, July 17).
Tensions between vertically integrated and independent fuel companies will have an uneven impact across Russia. Regions where independent stations hold a larger market share are likely to face longer deficits than regions more important to state-owned companies. In Moscow, for example, the situation has already begun to stabilize. At the same time, Krasnodar krai—where independent stations comprise over 60 percent of the region’s market—has seen over a third of its stations close and a fuel black market emerge (Dzen.ru, July 19; Ekspert South, July 21; Telegram/@russicaRU, July 22).
The influence of governors’ personal networks will be a consequential factor in how regions manage. The independent media outlet Vyorstka reported that the Kremlin has prevented governors from looking for available fuel on the open market. Instead, federal authorities are tasked with distributing fuel supplies from state reserves, while regional governors compete for allocations (Telegram/@svobodnieslova, July 14). In this system, regional heads with connections in influential patronage networks are likely to receive more support from state oil companies than those with lower-level personal connections.
Governor of Krasnoyarsk krai Mikhail Kotyukov has already used this system to his advantage. Krasnoyarsk has been of particular interest to Igor Sechin, Rosneft CEO and Putin’s longtime confidant. Rosneft’s flagship project, Vostok Oil, is located in the region, and as a result, Sechin has maintained close relations with Krasnoyarsk authorities. Kotyukov’s predecessor, Aleksandr Uss, for example, assumed a role on Rosneft’s Board of Directors in July 2022 (Babr24, July 4, 2022; Interfax, April 20, 2023). Kotyukov secured a July 15 meeting with Novak in Moscow, where Novak stressed that ensuring the supply of petroleum products to Krasnoyarsk remains a priority (Government of Russia, July 15). In comparison, other regional officials disclosed to Vyorstka that fuel supplies have not been allocated equally. One Siberian official told the outlet, “Some people feel left out: everything is poor in their reports on fuel reserves and availability, but fuel is still not going to them” (Telegram/@svobodnieslova, July 14).
The federal response to the current fuel crisis resembles its responses to the COVID-19 pandemic and the September 2022 partial mobilization aftermath. During both crises, the Kremlin retreated before delegating problem-solving and communication responsibilities to the regional heads. On May 11, 2020, Putin signed a decree that passed most of the unpopular pandemic measures onto regional governors. The decree required governors to identify where quarantine measures should be prolonged, order any shutdowns of public or private spaces, and limit intra-regional mobility (President of Russia, May 11, 2020). After announcing a partial mobilization in September 2022, Putin similarly passed the most unpopular measures onto regional governors, obligating them to reach mobilization targets, report casualties, and introduce martial law or any wartime restrictions in their regions (Government of Russia, September 21, 2022).
This strategy proved successful in directing blame away from the Kremlin. Polling conducted during the pandemic, for example, found that Russians tended to blame local authorities for problems related to COVID-19, rather than Putin (Chaisty, Gerry, and Whitefield, 2021). [2] Despite the Kremlin shifting blame for mistakes and assigning unpopular measures to the governors, however, no regional head openly pushed back against Moscow.
The current fuel deficit similarly will not lead to true open dissent. In past crises, the Kremlin placed more emphasis on the appearance of problem-solving than on good governance, greatly reducing the pressure on regional governors. Many governors routinely falsified data on COVID-19 infection and death rates to show the Kremlin that the crisis was under control, with no public reproach from Moscow (Busygina and Klimovich, 2022). [3] According to recent research, the Kremlin has also not punished governors who underperformed mobilization quotas, nor rewarded governors for overperformance (Klimovich, 2024). [4] Regional heads, therefore, have little incentive to push back against the Kremlin’s demands, as they are reliant on Moscow for their positions and any change in Russia’s current political system threatens their access to resources.
The Kremlin undoubtedly wants fuel availability to stabilize by the September 18–20 State Duma elections. The tense domestic atmosphere has already largely halted campaigning. According to the Atlas of Elections project—which monitors Russian state television and social media—the Duma elections have gone almost completely unmentioned on official channels, despite campaigning formally starting on June 16 (Atlas Vyborov, July 20, 21). With no solutions to offer, the Kremlin is instead attempting to suppress turnout as much as possible, while mobilizing reliably controlled voters behind the scenes (Riddle, July 16).
Governors play a large role in this process. The ruling United Russia party recently released its candidate list, comprising 57 electoral regions. The vast majority of these regional lists are headed by governors (United Russia, June 2026; Vedomosti, June 28). Governors provide name recognition for United Russia’s candidates, and are tasked ahead of time with ensuring certain turnout and vote percentages for the party (Meduza, June 24, 2020; RBC, April 2, 2023). Regional heads who are already devoting their attention to the fuel crisis, however, may have less time—or desire—to mobilize reliable voters. The Kremlin seems to recognize this possibility, with recent reports indicating that the Presidential Administration lowered its expected percentage for United Russia in the upcoming elections (Vedomosti, June 23).
The final election results are not in question. The Kremlin has many avenues for securing its desired outcome and has long eliminated any true opposition. The chasm between Russia’s ruling elites and its people, however, has rarely been more pronounced. Governors will attempt to maintain social stability in their regions, but none will point to the true cause of the deficits. State Duma members and federal officials have chosen to hide from the public rather than propose potential remedies. No one has an answer to the crisis because no one is able to acknowledge that Putin’s war created it.
Notes
[1] Before 2014, the Russian Federation was composed of 83 federal subjects. Russia has since claimed an additional 6 federal subjects out of Ukraine’s occupied territories— Crimea, Sevastopol, Donetsk, Luhansk, Kherson, and Zaporizhzhia. All of these subjects remain internationally recognized as part of Ukraine.
[2] Chaisty, Paul, Christopher J Gerry, and Stephen Whitefield. 2022. “The Buck Stops Elsewhere: Authoritarian Resilience and the Politics of Responsibility for COVID-19 in Russia.” Post-Soviet Affairs 38 (5): 366–85. doi:10.1080/1060586X.2021.2010397.
[3] Busygina, Irina, and Stanislav Klimovich. 2024. “Pandemic Decentralization: COVID-19 and Principal–Agent Relations in Russia.” Problems of Post-Communism 71 (1): 1–12. doi:10.1080/10758216.2022.2111313.
[4] Klimovich, Stanislav. 2024. “Federalism at War: Putin’s Blame Game, Regional Governors, and the Invasion of Ukraine.” Post-Soviet Affairs 40 (4): 262–77. doi:10.1080/1060586X.2024.2352978.
