Russian gasoline shortage drives propane-butane prices to five-year high

Gasoline shortage redirects demand

Russia’s gasoline shortage is accelerating demand for liquefied petroleum gas, primarily propane and butane, and testing a market that was previously regarded as deeply oversupplied. Kommersant reported that demand for propane-butane mixture rose by almost 9% in the second quarter of 2026 to 1.65 million tonnes as consumers bought fuel in advance to protect against further shortages.

Transport is Russia’s second-largest LPG-consuming sector after petrochemicals and represents about one-third of demand. According to the World Liquid Gas Association, Russia was already the world’s largest consumer of automotive LPG in 2024, using about 3.5 million tonnes. The country has approximately 10,000 automotive gas filling stations, making propane-butane the most accessible gas-based alternative for motorists.

Conversions rise, but equipment is scarce

Applications to install LPG equipment increased by about 30–35% above normal levels during the summer, according to Denis Kornienko of the Russian Environmental Society. Some service companies recorded July demand three to five times higher than in June. Installation prices rose by 10–20%, while workshops were unable to satisfy all orders because the required kits are mainly imported and were not available in sufficient quantities.

The shift remains constrained by technical requirements and a registration process that can take months. Some conversions therefore do not appear in official statistics. Government policy also prioritizes methane, hybrid vehicles and electric vehicles under the automotive industry development strategy through 2035. Even so, automotive LPG demand increased by about 5% in 2025 and by 8% in the first half of 2026, Kommersant reported.

Plant work and exports tighten availability

Russia produces 15 million tonnes of LPG and ranks fourth globally, behind the United States at 84 million tonnes, China at 32 million tonnes and Saudi Arabia at 26 million tonnes. SIBUR held 47% of the Russian market in 2025 and Gazprom 15%. Trading on the St Petersburg exchange, which meets about 45% of domestic demand, rose by 9.1% year on year in January–August to 1.64 million tonnes but still did not fully cover buying interest.

Seasonal consumption, scheduled maintenance, gasoline substitution and speculative demand all supported prices. Market anxiety increased after SIBUR’s ZapSibNeftekhim stopped on 11 August. The complex accounts for about 6 million tonnes of LPG, or roughly 40% of national output, although it processes most of that volume internally into polymers.

Exports added pressure. Olga Osharova of S+Consulting said Russian LPG exports had increased by more than 15% by mid-2026 as shortages supported world prices. Growth covered most destinations, particularly Asia-Pacific markets, while shipments to the European Union and Turkey declined. Russia nevertheless exports more than 3.6 million tonnes annually, giving producers scope to redirect supply domestically if necessary, Rupec head Dmitry Semyagin told ANGI.

Exchange limits curb the surge

The Siberia and Urals propane-butane index rose by 41% in the first month of summer to 27,620 rubles per tonne and by 78% from the start of the year. Prices reached a five-year high of 44,500 rubles per tonne on 8 July, below the record of 52,140 rubles set in August 2021.

From 9 July, the exchange limited upward price movements to 0.1% per session, versus the previous symmetric 20% range, and restricted buyers’ applications. Prices later fell to 26,970 rubles at the end of August before rising by more than 15% to 32,100 rubles per tonne in early September. ANGI cited restricted Middle Eastern supply and higher export parity as the causes. Osharova expects prices to remain at 30,000–35,000 rubles per tonne through the end of autumn, while Semyagin sees no fundamental basis for a domestic shortage.