Russia’s oil and gas revenues in August were almost 21% lower than in July at 642.7 billion roubles ($6.6 billion), finance ministry data showed on Tuesday, amid rising subsidies to oil refineries and a cyclical fall in profit-based tax.
Revenues were also down 4.3% compared to the same month in 2022. In July this year, oil and gas revenues stood at 811.3 billion roubles.
Proceeds from oil and gas sales are crucial for Russia’s commodity-oriented economy.
In January-August, oil and gas revenues fell by 38.1%, year-on-year, to 4.836 trillion roubles, as tax returns declined due to lower prices and sales volumes.
Russia’s energy revenues have been squeezed by Western sanctions, such as price caps and an embargo on sea-borne oil exports, and by the closure of the Nord Stream gas pipelines to Europe that were blown up in September 2022. Investigators have yet to establish who was responsible for the blasts.
Proceeds in August declined mainly due to a steep fall in profit-based tax, which is paid once a quarter. Payments to refineries under the so-called “damping mechanism” – introduced to stop companies from capitalising on high fuel export prices in order to defend the domestic market – also rose to 185.9 billion roubles last month from 110.4 billion roubles in July.
Budget subsidies to refining companies from an “oil reverse excise tax” also rose, to 113.8 billion roubles last month, from 95.1 billion roubles in July.
At the same time, revenues from mineral extraction tax rose in August to 874.9 billion roubles from 673 billion roubles in July thanks to an oil price increase.
The finance ministry budgeted for a fall in oil and gas revenues by 23% this year to 8.94 trillion roubles. It expects a budget deficit of almost 3 trillion roubles, or 2% of gross domestic product (GDP).
Russia’s budget deficit for January-July widened to 2.82 trillion roubles ($29.3 billion), or 1.8% of GDP. Finance Minister Anton Siluanov had repeatedly said that Russia will stick to its target for a 2023 deficit of no more than 2% of GDP. But in July he acknowledged that 2.5% of GDP was possible.
Source: Reuters (Reporting by Darya Korsunskaya; writing by Vladimir Soldatkin)