WionDrive News Desk 
Liquefied petroleum gas (LPG) prices in Russia experienced a sharp decline in December, halving compared to the previous month. The drop comes in the wake of an oversupply in the domestic market following European Union (EU) sanctions that curtailed exports of the fuel, according to Reuters’ calculations.
The EU’s ban on Russian LPG, which includes propane and butane commonly used as automotive fuel, for heating, and in petrochemical production, took effect on December 20. The sanctions were part of broader measures proposed last year, spearheaded by Poland—previously one of Russia’s largest LPG importers.
This shift in trade dynamics has significantly impacted Russia’s LPG market. Wholesale prices fell dramatically from approximately 28,000 roubles (USD 280) per metric ton in November to around 14,000 roubles (USD 140) per metric ton by December, as per industry data and trading sources.
Exports typically offer higher profits, with Russian LPG selling for up to USD 230 per metric ton to Poland before sanctions. However, sanctions have left only about 20% of Russia’s LPG exports eligible for international markets.
Adjusting to a Changing Export Landscape
Facing limited access to traditional European markets, Russia has redirected LPG supplies to countries such as China, Mongolia, Armenia, Georgia, and Azerbaijan. Industry sources highlight significant potential for expanded exports to China, while exports to Afghanistan remain constrained due to payment complications.
“We are open to supplying LPG to Afghanistan, but our partners there prefer cash transactions. This creates logistical and regulatory challenges for repatriating the funds to Russia,” a trader noted.
The EU sanctions have underscored the importance of diversification for Russian LPG exporters. As global markets shift, the domestic LPG surplus has benefited local consumers with lower prices but poses challenges for exporters as they seek alternative revenue streams amid geopolitical and economic pressures.
