The Russian government's net budget revenues from oil and gas fell by 24% last year, to RUB 8.82 trillion. ($99.3 billion) in the form of taxes from the oil and gas industry, writes Bloomberg.
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What is known
The flow of petrodollars – a key source of financing for the Kremlin's invasion of Ukraine – has waned as the price of Russian barrels has fallen amid falling global oil prices and increasing Western energy sanctions.
Official data shows that a sharp decline in Russian pipeline gas exports and generous government subsidies provided to the country's oil industry have exacerbated the decline in net revenues.
According to the Russian Ministry of Finance, the average price of Urals crude, the main export oil Russia, last year fell by more than 17% to $62.99 per barrel. That's still above the $60 per barrel cap imposed by the G7 countries and their allies at the end of 2022 to curb Kremlin revenues.
Russia's decision to stop most of its pipeline gas supplies to Europe led to a decrease in budget revenues from gas export duties by more than 65% to RUB 566 billion. last year.
According to International Energy Agency estimates, pipeline gas exports to the European Union decreased by 65% compared to last year and amounted to only 20-25 billion cubic meters.
Russian government also paid the oil industry 2.9 trillion rubles. subsidies last year, which further reduced the net revenue figure. For comparison: budget expenditures on healthcare and education combined amount to 3.1 trillion rubles. In an effort to increase revenues, the Russian government in September halved one of these subsidies to the oil industry.
The move caused fuel shortages throughout Russia, forcing the cabinet to immediately restore full subsidies and even impose a temporary ban on fuel exports. to curb domestic prices.