The upcoming EU embargo on diesel fuel from Russia will have "potential effects" on the lives of many people across the globe, as it will likely lead to further increase in prices, a US media outlet has warned.
Referring to the Russian special military operation in Ukraine, the outlet cautioned that the 27-nation bloc’s February 5 ban “has risks” given that “diesel prices have already jumped since the war started on February 24, and they could rise again for the fuel that is key to the global economy.”
The outlet recalled that many things that people buy or eat are transported “at some point” by trucks, which mostly run on diesel, which in turn also “powers farm equipment, city buses and industrial equipment.”
“The higher cost of diesel is built into the price of almost everything, helping push up inflation that has made life harder for people worldwide,” according to the outlet.
The report comes after diesel prices already rose to over $1,000 per ton last week from $800 per ton in early December.
In a separate development last week, a US media report cited unnamed EU sources as saying that the European Commission is "proposing that the EU set a $100 per barrel price cap on Russian diesel fuel and a $45/bbl cap on discounted products like fuel oil” in order to tackle potential repercussions from the upcoming embargo.
Last year, the EU, G7 nations and Australia imposed a $60 per barrel price cap on Russian oil, which went into effect on December 5 and will be reviewed every two months to remain at 5% below the International Energy Agency benchmark.
The cap was introduced as part of the EU’s sanctions over the Russian special operation in Ukraine, which also prompted the bloc to introduce a ban on coal and crude imports from Russia earlier that year. Moscow has repeatedly denounced the oil price cap as unacceptable, underlining that the country will never agree to this destruction of market pricing.
On February 1, Russian President Vladimir Putin’s decree on retaliatory measures in connection with the price cap came into force; this is a document stipulating that Russia bans the supply of oil to countries and legal entities that require compliance with the price cap in contracts.