{"id":123689,"date":"2024-09-09T23:00:16","date_gmt":"2024-09-09T13:00:16","guid":{"rendered":"https:\/\/www.railfreight.com\/?p=55863"},"modified":"2024-09-09T23:00:16","modified_gmt":"2024-09-09T13:00:16","slug":"it-is-busy-on-the-russian-railways-and-the-long-term-fuel-priority-will-make-things-worse","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=123689","title":{"rendered":"It is busy on the Russian railways, and the long-term fuel priority will make things worse"},"content":{"rendered":"

There is not enough space for everybody on Russia’s rail network. The Federal Antimonopoly Agency (FAA) came out in support of a longer fuel prioritisation on the rails, in order to guarantee sufficient deliveries during difficult economic times. However, the prioritisation will likely hurt other – less happy – industries that also rely on rail for their logistics.<\/strong>
\n<\/span>The prioritisation of fuel on the rail network was supposed to expire on 1 September. It would have been relegated from the third position in the priority list down to the sixth, or depending on the fuel\u2019s destination, even lower than that.<\/p>\n

Already in July, oil companies protested the upcoming deprioritisation of their products, saying that it would lead to difficulties with deliveries, writes the Russian publication Kommersant.<\/p>\n

On the other hand, analysts and representatives of other sectors pointed out that oil companies are \u201cnot alone on the network\u201d and that the \u201cimmortalised\u201d priority for oil products would lead to significant losses for other economic branches. Regardless, the FAA has now come out in support of an extension beyond this year.<\/p>\n

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Priority rules on Russian rail<\/strong><\/p>\n

The first two categories include freight trains prioritised by law<\/em>, including emergency and military transportation. The third category has freight prioritised by presidential decree, <\/em>which is the current category for fuel and some coal. Further down the list are regular priority categories. Since the official priority list was suspended<\/a> in 2022 due to the war in Ukraine, monopolist Russian Railways has been managing the regular categories.<\/p>\n<\/div>\n

The continuation of the fuel measure indeed seems likely to lead to problems for other rail users. According to Kommersant, 60 per cent of all freight on Russia\u2019s Far East railways already falls into the third category, which consists of freight prioritised by presidential decree. Space for other goods is becoming tighter and tighter.<\/p>\n

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A fuel train in northern Russia. Image: Shutterstock. \u00a9 alleks19760526<\/figcaption><\/figure>\n

RZD cannot comply<\/h2>\n

Even in the current situation, Russian Railways (RZD) has already been unable to comply with the prioritisation as ordered by the president. Besides coal, the third priority category also includes a predetermined volume of coal to be transported east. This includes approximately 100 million tonnes from the leading coal-producing region Kemerovo.<\/p>\n

However, earlier this year, it became clear that RZD was already behind in meeting these coal priority quotas. The prioritised transportation of coal has led to a decline of 13 million tonnes in the loading of more profitable goods. Subsequently, it seems unlikely that the continued prioritisation of fuel will spare other rail users.<\/p>\n

Nevertheless, the extension of fuel prioritisation does not come as a surprise. A Kommersant source says that delays in fuel delivery will ultimately lead to more inflation, something which the Kremlin has been vocal about wanting to prevent.<\/p>\n