0654GMT//Petrol prices rise in Russia; Kremlin economists warn of recession; Russia-Azerbaijan-Iran trade route meeting goes ahead after Putin apology

PETROL PRICES RISE: Car fuel prices in Russia continued to hit new records, a reflection of shortages caused by Ukrainian drone attacks on oil refineries. Prices are up by around 60% since April. The Kremlin has reduced rules around blending fuels, yet another attempt to ease shortages. Motorists in Novosibirsk have now reported that petrol stations are running out of fuel. (COMMENT: The fuel shortages have become a real problem for the Kremlin. Reports have said that Russia has lost 40% of its refining capacity. Sources in Moscow, St Petersburg and Kazan have all said that there are currently no shortages in any of Russia's three major cities.)

RECESSION LIKELY: Russia is likely to tip into a recession next year, the Centre for Macroeconomic Analysis and Short-Term Forecasting (CMASF) has warned. It said that there was likely to be "a surge" in economic activity towards the end of 2025 to try to beat a VAT increase scheduled for Jan. 1, but this will not be carried through into 2026. (COMMENT: The CMASF is a pro-Kremlin think tank. This means that its warnings of a recession need to be taken seriously. It said that high interest rates, maintained to beat inflation and protect the rouble, are the main problems for the Russian economy. Most economists have said that Russia's civilian economy is already in recession.)

SHARES SLUMP IN CONSTRUCTION COMPANIES: Shares in Russian housing companies have fallen by up to 25% since the start of September after data was released showing a collapse in demand for cheaper housing, Russian media has reported. Consumers said that demand had collapsed because interest rates of 17%, down from 22% earlier in the year, made mortgages unaffordable. (COMMENT: Russian construction companies have been leading calls for the Kremlin to accelerate interest rate cuts.)

NORTH-SOUTH TRADE ROUTE MEETING: A previously cancelled meeting on a new trade route running from Russia to India was held in Baku between Russia, Azerbaijan and Iran, less than a week after Vladimir Putin apologised to Ilham Aliyev, the Azerbaijani president, for shooting down a passenger plane. (COMMENT: The North-South Trade Corridor is an important route for the Kremlin to develop and was one of the main reasons that it patched up relations with Azerbaijan, badly damaged this year because of the row over the downed passenger plane. Russia was represented at the meeting by deputy PM Alexey Overchuck. He had cancelled this meeting in June when bilateral relations with Azerbaijan collapsed. The Kremlin has spent heavily on modernising road and rail links through Azerbaijan and Iran for the North-South corridor.)

PRISON FOR CHECHNYA INSULTS: A Russian blogger kidnapped by Chechen heavies in broad daylight at a Moscow train station in June after allegedly insulting Chechens, Islam and Allah on his podcast has been sent to prison for five years for inciting hatred. Areg Shchepikhin was released by his captors, looking ruffled and bruised 24 hours after being kidnapped. He had been forced to make a public apology. He was then arrested by Russian police. (COMMENT: This case shows the twisted nature of Russian society and how much leeway Chechen dictator Ramzan Kadyrov has. Shchepikhin's abductors were also detained by Russian police but were released without a charge.)