Putin has ordered his government to provide state funds in efforts to regulate domestic heating fuel prices. Domestic fuel prices have been going up, as the prices for Russian oil and oil products dropped on the International markets, decreasing the country’s export revenue. Now Putin’s government is responding with new measures, stating that it is concerned with getting the country through the sometimes harsh winter.
In some regions, especially in the Russian Arctic, winter temperatures can fall down to as low as -45 degrees Celsius. This means that in winter Russia struggles with surging demand for heating fuel.
The price cap was first introduced on the 23rd of February and re-enforced again on the 1st of July.
The price cap is a cut off price regulated by global markets above which a product can not be sold. The Russian price cap is now 60 USD per-barrel. This has weakened the Russian economy and hit its geopolitical influence, as its oil and oil products have been easily available at a lower price.
This was done in an effort to reduce Russian investment in its war on Ukraine.
Countries voted on a price cap while Poland requested a slightly lower price cap, Ukraine demanded it be at 30 USD per-barrel. Consensus was reached at the current 60 per-barrel.