Russian economy faces crisis, fuel prices surge 14%

Russia's economy is facing severe difficulties, with fuel prices rising significantly. Fuel costs have increased by 14.6% for gasoline and 11.4% for diesel since January. This is the steepest rise in 13 years, according to Kyrylo Shevchenko, former chief of Ukraine's National Bank. Shevchenko attributes the surge to a mix of factors. These include higher taxes, strict export bans, rising inflation, and drone strikes on oil refineries in Ukraine. He warned that prices could rise another 7-10% by summer, which would further strain the Russian public. On March 19, a drone attack caused major damage to an oil pumping station in Krasnodar Krai. Firefighters are still battling a blaze that has affected vast areas. This incident follows another attack in February, leading to supply shortages across the country. Inflation is also rising rapidly, with consumer prices increasing by 0.67% in early 2025. Basic items like food and transportation are seeing sharp price hikes. Vodka prices are up 3.7%, cucumbers by 8.6%, and subway fares by 8.2%. The central bank kept interest rates at 21%, the highest in two decades, highlighting the ongoing inflation crisis. These economic problems are causing discontent among Russians, especially the poorest. Many are cutting back on essentials and holiday celebrations due to skyrocketing prices. The government’s inability to stabilize the economy has made people lose confidence and seek opportunities elsewhere. Experts believe that President Vladimir Putin's lack of preparation for a prolonged conflict has worsened the situation. George Barros from the Institute for Study of War stated that Russia's economy is in a precarious position, largely due to the absence of a long-term strategy.