Russian gasoline prices surpass US levels despite cheaper oil: Here's why

Due to the drop in global oil prices, fuel in the United States has been rapidly becoming cheaper, while the Russian market shows the opposite trend.

Experts explain that in Russia, crude oil accounts for only about 10%, whereas taxes and fees make up nearly 60% of the final price, making gasoline exceptionally expensive for consumers.

Fuel prices in the United States

Retail gasoline prices in the US have fallen below the psychological threshold of $3 per gallon — the lowest level since 2021, according to the US Department of Energy.

At the same time, American fuel prices have been decreasing for more than a year. This is due to declining global oil prices, which account for roughly half of the final cost of gasoline for US consumers.

According to the US Energy Information Administration (EIA), as of December 1, the average gasoline price in the US was $2.98 per gallon, and even lower in some regions. On the Gulf Coast, a gallon costs only $2.55, while on the US West Coast, prices exceed $4. The main factor behind the price drop is the collapse of oil prices: Brent is trading near $63 per barrel, and analysts predict a further decline to $50, and potentially even $40.

Notably, prices in the US traditionally drop after the end of the summer season, and this year, an additional factor has been weak demand dynamics. JPMorgan Chase analysts suggest that without intervention by the Organization of the Petroleum Exporting Countries (OPEC), Brent could fall to $30 in 2026, which would continue to keep US fuel prices low.

Fuel prices in Russia

In Russia, gasoline prices continue to rise despite the global drop in oil prices. According to Rosstat, over the first 11 months of 2025, the price increased by 11.2%, which is twice the inflation rate. The average cost per liter at the beginning of December is 64.87 rubles, which is equivalent to about $3.23 per gallon. This means Russian gasoline is already 8% more expensive than in the United States.

Meanwhile, the situation in Russia is the opposite: gasoline there is becoming more expensive faster than inflation, and crude oil accounts for only about 10% of its price, while taxes and fees make up nearly 60%.

Experts note that this is due not only to the tax burden but also to artificial quasi-market pricing.

Russia maintains the so-called damping mechanism, which compensates oil companies for the difference between domestic and export prices, effectively making the market dependent on budget subsidies. This is why fuel prices hardly respond to the fall in global oil benchmarks.

It is noted that wholesale prices in Russia fell slightly — by 7% — in December after fuel export restrictions and adjustments to exchange mechanisms. However, analysts do not expect a long-term decline due to upcoming seasonal purchases and the return of demand ahead of the New Year holidays.

The EU and G7 plan to lift the price cap on Russian oil and introduce a radical ban on maritime shipments to significantly reduce the Kremlin's revenues.

Meanwhile, the United States has suspended certain sanctions against Russia's Lukoil.