Russia is reportedly working to launch large-scale seaborne gasoline imports from India to plug a widening domestic fuel shortfall, after a sustained wave of Ukrainian drone strikes battered its refinery infrastructure, according to a report by the Kyiv Post. The move, if finalised, would mark a significant expansion of the energy trade corridor between New Delhi and Moscow.

The Proposed Subsidy Mechanism

Draft amendments to Russia's Tax Code would extend an existing subsidy framework to cover companies undertaking gasoline imports from India, the Kyiv Post reported, citing an RBC report. Under the proposed rules, the subsidy would be calculated based on an indicative gasoline price on the Indian market and the cost of shipping fuel from Indian ports to Russia. The State Duma's budget and tax committee has already backed the bill, according to the report.

Scale of Russia's Refinery Crisis

Strikes on Russian refining facilities have pushed the country's crude processing to its lowest level in two decades, cutting gasoline output by roughly 25 per cent. Operating refineries are currently producing approximately 85,000 tonnes of gasoline per day against a summer demand of around 1.11 lakh tonnes, leaving a structural daily shortfall of roughly 25,000 tonnes. The shortfall now accounts for about 20 per cent of domestic consumption and has driven wholesale gasoline prices above 100 rubles, the report said. Notably, Russian light aircraft operators have reportedly begun substituting automobile gasoline for aviation fuel amid the shortage and a surge in aviation fuel prices.

India's Role in Russia's Energy Supply Chain

India emerged as Russia's largest crude buyer following the full-scale invasion of Ukraine, purchasing between 1.5 and 2 million barrels per day in the period after the conflict began. That figure reportedly reached a record 2.66 million barrels per day in June 2026, a portion of which is processed at Indian refineries and re-exported as petroleum products, including gasoline. India's total gasoline exports themselves hit a record high of 4 lakh barrels per day in 2025, with the bulk absorbed by Asian markets.

Geopolitical and Trade Implications

This development comes amid intensifying scrutiny of India's energy ties with Russia, particularly from Western governments seeking to tighten sanctions enforcement. India has consistently maintained that its energy purchases are driven by commercial considerations and national interest. The prospect of Indian-refined gasoline flowing into Russia on a formalised, subsidy-backed basis could sharpen that diplomatic tension further. This is also the latest indicator that Ukrainian drone campaigns — targeting refinery infrastructure deep inside Russian territory — are beginning to produce measurable economic consequences for Moscow's domestic supply chains.

What to Watch

The bill still requires full legislative approval before any large-scale import programme can begin. Industry observers will track whether the State Duma passes the Tax Code amendments and whether major Indian refiners — already navigating Western pressure — choose to participate in a formalised export arrangement with Russia.