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Mongolia’s Fuel Crisis: Why Petrol Shortages May Persist into September | Peak News
English News Section

Mongolia’s Fuel Crisis: Why Petrol Shortages May Persist into September

Ч.Сумъяабазар
08 сарын 26, 2026

ULAANBAATAR, Mongolia — Mongolia’s petrol shortage has eased from the long queues and emergency sales restrictions seen earlier this month, but the country is not yet out of danger.

The immediate crisis was triggered by falling imports of AI-92 petrol from Russia at a time when domestic demand remained high. But behind the queues at petrol stations is a deeper vulnerability: Mongolia imports virtually all of its petroleum products, with Russia historically supplying the overwhelming majority.

The government has secured additional supplies from Russia and is seeking more from China and South Korea. Yet developments in the Russian fuel market suggest that September could remain difficult, particularly for diesel.

Russia remains the critical link

Mongolia’s dependence on imported fuel is unusually high. Government figures presented earlier this year said the country meets 100% of its fuel demand through imports, with about 98% coming from Russia and the remainder mainly from China. 

That dependence became a problem in the middle of 2026 as Russian fuel production and exports came under pressure.

Russian refineries have been hit by repeated Ukrainian drone attacks, while seasonal demand has increased. Russia has responded by restricting fuel exports and prioritising its domestic market. Reuters reported this week that Russia was preparing to extend restrictions on diesel exports into September because domestic supply problems had not been fully resolved. 

For Mongolia, the consequences were visible in August.

According to Mongolia’s Ministry of Industry and Mineral Resources, AI-92 imports fell from 57,655 tonnes in June to 47,088 tonnes in July. By 19 August, Mongolia had imported only 29,639 tonnes of AI-92 for the month. Compared with the same periods last year, June imports were down by about 11,000 tonnes and July imports by about 30,000 tonnes. 

The government then imposed temporary restrictions, including a MNT50,000 limit per vehicle and an even-odd licence-plate system for fuel purchases.

Those restrictions were lifted from 15 August after additional supplies arrived.

The ministry said Russia had agreed to supply Mongolia with an additional 25,000 tonnes of AI-92, on top of an existing August agreement for 50,000 tonnes of AI-92 and 15,000 tonnes of AI-95. 

The additional Russian supply was crucial because Mongolia’s normal monthly fuel requirement is estimated at around 60,000–70,000 tonnes. 

China and South Korea: emergency alternatives

The government has also accelerated efforts to reduce its immediate reliance on Russia.

China supplied Mongolia with 6,000 tonnes of AI-92 in August, while the Mongolian government has asked Beijing to increase regular deliveries to 12,000–15,000 tonnes a month. The numbers show both the potential and the limitations of this strategy.

China is capable of becoming a much larger supplier, but its own restrictions on fuel exports make it difficult for Mongolia to rely on Chinese supplies at short notice. As of August 24, Mongolia's Industry and Mineral Resources Ministry said China had supplied 6,000 tonnes of AI-92, 2,000 tonnes of diesel and 3,000 tonnes of aviation fuel in August.

For September, China had indicated it could provide 10,000 tonnes of AI-92 and 3,000 tonnes of aviation fuel, but had not yet offered a diesel supply.

South Korea has emerged as another alternative source. Mongolia has contracted for Korean fuel, including Euro-5 standard products, as the government attempts to diversify its supply chain. Official August plans put Mongolia's total confirmed petroleum procurement from Russia, China and South Korea at 86,460 tonnes of AI-92, 1,280 tonnes of AI-95, 178,650 tonnes of diesel and 7,000 tonnes of aviation fuel. 

The diversification is particularly important because diesel accounts for roughly 65% of Mongolia's total fuel consumption, according to the ministry. 

Why September could be harder

The government's short-term response has improved petrol availability, but several factors suggest that September may not immediately bring a return to completely normal conditions. The first is Russia. Russia itself is experiencing another wave of fuel shortages. Reuters reported in August that shortages had returned in at least 10 Russian regions, with some petrol stations reintroducing sales restrictions. Gasoline sales on the St Petersburg International Mercantile Exchange had fallen by about 20% compared with the second half of July. 

Moscow has also seen queues and restrictions, with major fuel companies limiting petrol purchases at some stations. That means Mongolia is competing for supply from a market that is itself under pressure.

The second problem is diesel.

Reuters reported on August 25 that Russia was expected to extend its diesel export restrictions through September, while gasoline export restrictions are already scheduled to remain in place until January 2027.

Although Mongolia benefits from exemptions and bilateral arrangements in some Russian export restrictions, the underlying shortage still matters: if Russian refineries produce less fuel, there is less available for foreign buyers regardless of formal exemptions.

The third risk is demand.

Mongolia's diesel consumption is heavily connected to agriculture, mining, transportation and industrial activity. Now October will start harvesting season, which require more diesel. Chinese-invested mining companies alone consume about 1.2 million tonnes of diesel a year, according to the Mongolian official. That makes diesel availability particularly important as the mining sector continues operating at scale.

So, will September be better?

Probably better than the first half of August for AI-92 petrol — but not necessarily normal across all fuel types.

The strongest reason for cautious optimism is that Mongolia has already secured additional Russian AI-92 supplies and has begun receiving substantial volumes. By August 18, the government said it had received 500 rail wagons of AI-92 and 1,314 wagons of diesel during August. 

On August 19 alone, 76 wagons, carrying about 4,560 tonnes of AI-92, arrived in Ulaanbaatar. The ministry said 1,950 tonnes were distributed to 218 stations in the capital and 600 tonnes to 56 stations in the provinces. 

The government is also expanding storage capacity. Eighteen companies are building or expanding 22 petroleum storage tanks farms, with some already entering operation.

But those measures address the symptoms more quickly than the structural problem.

Mongolia still depends overwhelmingly on one supplier, while that supplier is experiencing its own fuel crisis. China can provide a second source, but current confirmed volumes remain relatively small. South Korean supplies can help diversify the market, but they cannot immediately replace tens of thousands of tonnes of Russian fuel.

The government's own strategy recognises this vulnerability. On August 24, the Ministry of Industry and Mineral Resources said it wants to increase China's share of Mongolia's fuel imports to 30% of domestic consumption. That is a medium-term diversification strategy, not an immediate solution for September.

For Mongolian motorists, therefore, the most likely scenario is not a repeat of the severe queues seen in early August, provided Russian deliveries continue according to schedule.

But September is unlikely to be a month in which Mongolia can afford to relax.

If Russian refinery output recovers and contracted deliveries arrive on time, AI-92 availability should remain considerably more stable. If Russian shortages deepen, particularly in diesel, Mongolia could once again face pressure at petrol stations — even if the government avoids nationwide rationing.

The August crisis has therefore exposed a problem larger than a temporary shortage: Mongolia's fuel security remains closely tied to the stability of Russia's petroleum market.

Until alternative suppliers, storage capacity and domestic refining capacity become large enough to absorb a disruption, a fuel crisis in Russia can still become a crisis in Mongolia.

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