Aisen Nikolaev, the head of Yakutia, outlined the prospects for developing the republic’s oil refining infrastructure. Regional authorities believe it would be advisable to build a small oil refinery focused primarily on producing diesel fuel, he noted in an interview with the newspaper *Vedomosti*.

According to Mr. Nikolaev, building a large refinery with a capacity of several million metric tons is currently not economically viable. Current fiscal policy in the oil refining sector makes such a project unprofitable.

Annual consumption of petroleum products in Yakutia reaches 1.3 million metric tons, with diesel accounting for about 80% of that total. Today, importing jet fuel and other types of fuel is cheaper than establishing local production. However, the share of logistics costs in the final price of fuel is steadily rising, the head of the republic noted.

If transportation costs continue to rise, a small-scale oil refinery could become economically viable and would allow for more efficient meeting of the domestic market’s needs.

Currently, the region is entirely dependent on imported fuel. With the assistance of the republic’s government and the federal government, Yakutia’s main supplier, SakhaNeftegazsbyt JSC, has built up fuel reserves.

At the direction of Russian Deputy Prime Minister Alexander Novak, the region has determined the priority fuel volumes for the Northern Delivery Program and approved precise shipment schedules for July and August to ensure that Yakutia’s remote areas receive fuel without delay.

According to Dmitry Lepchikov, the republic’s Minister of Civil Defense and Public Safety, the exchange-traded deals were canceled, and the republic has reached a preliminary agreement with Gazprom Neft on direct rail deliveries of diesel fuel.

As a reminder, petroleum products are delivered to Yakutia both by rail and by water—via the Northern Sea Route from Arkhangelsk.