EU, Group of Seven impose price cap on Russian petroleum

PHOTO AFP BEIJING - The implementation of further price caps for Russian petroleum products, which were adopted Saturday by the European Union and the Group of Seven, began on Sunday despite Russia's vow to take measures to protect its interests.

The European Commission said in a press release that the price cap for premium-to- crude petroleum products, such as diesel, kerosene and gasoline, is set at $100 per barrel, while the cap for discount-to- crude petroleum products, such as fuel oil and naphtha, is set at $45 per barrel.

The commission added that there is a 55 day wind-down period for Russian petroleum products purchased above the price cap, provided that it is loaded into a vessel at the loading port before Feb 5, 2023, and unloaded at the final port of destination before April 1, 2023.

The EU's ban on imports of Russian petroleum products took effect in June 2022.

The Kremlin warned of a further imbalance in global energy markets. The international energy markets will be more imbalanced because of this, but we are taking measures to hedge our interests against the risks associated, said Dmitry Peskov, a Kremlin spokesman.

In December 2022, the EU put a price cap of $60 per barrel on Russian crude oil, a move adopted by the Group of Seven.

Under the price cap, insurance, finance and other services for Russian oil shipments will be banned if oil sells for more than $60 a barrel.

On December 27, 2022, Russian President Vladimir Putin signed a decree announcing countermeasures to the price ceiling on Russian oil.

The supply of Russian oil and petroleum products to foreign entities and individuals will be banned if a price cap is directly or indirectly stipulated in the contracts.

The Russian president can grant special permission to deliver oil and petroleum products that are not permitted under the decree.