Russia sees oil products output drop

Russia's output of oil products is expected to fall by about 2.5 percent in 2017 due to further work on a massive refinery modernisation programme aimed at boosting fuel quality, a deputy energy minister said.

In 2011, the government and oil producers agreed on the $50 billion initiative to update Russia's refineries, most of which were built in the 1940s and 1970s.

Russia's gasoline supplies almost ran dry in 2011 due to a lack of modern refining capacity, angering many voters in the run-up to Vladimir Putin's election to a third presidential term.

Deputy Energy Minister Kirill Molodtsov told a briefing in comments cleared for publication on Monday that the country would produce 277 million tonnes of oil products in 2016, falling to an estimated 270 million tonnes of higher quality fuels in 2017.

"This is mainly related to the rise in refinery yield," he said, adding that he did not expect fuel shortages next year despite extensive plans for refinery maintenance.

He said gasoline production was estimated at 39.8 million tonnes in 2017, with diesel output seen at more than 70 million tonnes.

Production of fuel oil could decline by more than two million tonnes due to an increase in export duty from Jan. 1 2017.

(Reporting by Vladimir Soldatkin; Editing by Helen Popper)