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Sources say that despite the export ban, Russia may face gasoline shortages.

Sources said that despite the export ban, Russia may face gasoline shortages this August due to low stocks at home, a peak in seasonal demand, and repairs being done by domestic refineries.

The ban was imposed Monday, and is intended to last through August 31. Its purpose is to stabilize the Russian market and avoid socially sensitive increases in motor fuel prices.

Traders say that it is unlikely to be enough to bring the market back to equilibrium, since gasoline export volumes are much smaller than the domestic consumption. They also claim that diverting the fuel to the local market will not satisfy the demand.

The oil companies expect state regulators will force them to sell more refined products in the domestic market and to delay planned plant maintenance.

The Russian Energy Ministry did not immediately respond to a comment request sent on Friday after hours of business.

According to participants in the market, this year, private retail networks did not create enough fuel reserves to meet summer's high demand. This was due to an increase in interest rates of 20%, which made borrowing from banks for fuel purchases in advance to be too expensive.

"At the moment, gasoline production has reached a normal summer level. Sales are also in line with expectations. Private traders are short of stocks," said a source from a large oil firm.

Sources at gas retailers say that frequent flight delays in Russian airports also lead to higher gasoline consumption as travellers switch from their cars.

Market participants and industry analysts believe that the shortage of gasoline is likely to persist until September. Prices may fall in October when local refineries complete repairs while demand drops off its seasonal peak. (Reporting and Editing by David Holmes).

(source: Reuters)