Russia may lose $280 million a day starting next month due to G-7 price cap on gas: Report

The Group of Seven (G-7) countries will seek to set two price caps on Russian refined products in February. The first one will be for products trading at a premium to crude oil and the other for those trading at a discount, a G7 official was quoted as saying by Reuters.

The G-7 coalition consists of Australia, Canada, Japan and the United States as well as the European Union. The grouping had introduced a $60 per barrel price cap on Russian crude products, starting December 5. This was on top of the European Union's embargo on imports of Russian crude by sea.

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Starting February 5, the G-7 coalition will also impose price caps on diesel and kerosene from Russia, in what the grouping believes will reduce Moscow's ability to finance its 'special military operations' in Ukraine.

Russia to lose $280 million a day starting Feb 5: Research

Russia will lose revenues up to $280 million a day from February 5, when the G-7 price cap gets extended to refined crude products from the country, a report by Finland'sCentre for Research on Energy and Clean Air said.

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"The EU’s oil ban and the oil price cap have finally kicked in and the impact is as significant as expected," Lauri Myllyvirta, lead analyst at CREA was quoted as saying by Bloomberg.

The Kremlin, however, said that it is too early to estimate the impact of impending geopolitical actions of February 5, Interfax reported.

Countries such as India, China and Turkey have not joined the G-7 price cap.

Russia has so far shipped $3.76billion of crude on vessels covered by the price cap, the bulk of which is taxed by the government, CREA said.

Other measures put in place alongside a cut of the price cap, such as strengthening penalties for non compliance and additional sanctions on sales of tankers, could cut fossil fuel revenues by a further $242.42 million per day, it said.

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