Higher Profit-Based Tax Doubles Russia’s Oil and Gas Revenues

Russia’s oil and gas revenues jumped in October, due to a cyclical surge in the profit-based tax, and more than doubled from September to $17.6 billion (1.635 trillion Russian rubles), data from the Russian finance ministry showed on Friday.

For September, the total Russian revenues from oil and gas stood at $8 billion (739 billion rubles).

The profit-based tax jumped in September and October, boosting revenues. The budget proceeds for Russia last month were also lifted by 27.5% compared to October 2022 as the government did not pay the so-called damper payment to the oil refiners.

Those payments were later reinstated after a shortage in fuels in Russia, partially caused by refiners exporting more fuel, prompted the authorities to introduce a ban on gasoline and diesel exports. The ban on seaborne diesel exports was lifted in early October provided that the diesel producer supplies at least 50% of the diesel to the domestic market.

Lower oil and natural gas prices, the price cap on Russian oil, and low sales of pipeline gas to Europe have all contributed to a 26.3% decline in Russia’s oil and gas revenues for January to October this year compared to last year. In the first ten months of 2023 Russian oil and gas revenues fell to $77.7 billion (7.211 trillion rubles).

The average price of the flagship Russian crude grade, Urals, was $81.52 per barrel in October 2023, finance ministry data showed earlier this week. That’s higher than the average Urals crude price for the same month of last year, $70.62 per barrel. To compare, North Sea Dated averaged $91.09 a barrel in October 2023.

Between January and October 2023, the price of Urals averaged $61.84 per barrel, down from the average of $79.57 a barrel in the same period of 2022, the data showed.

Source: Oilprice.com