Russia has experienced an increase in their oil and gas revenue due to soaring crude prices, as reported by Rossiyskaya Gazeta. The country’s income from energy exports reached 1.63 trillion rubles ($17.7 billion) in October, making it the highest level in one and a half years. This surge comes despite earlier forecasts predicting a significant deficit in revenue.
Factors contributing to Russia’s record profits include the soaring prices of the country’s flagship Urals blend of crude. In September, the average price for a barrel of Urals reached $83.08, significantly higher than the average price of $61.84 during the first 10 months of the year. This increase in crude prices has significantly impacted Russia’s energy revenues.
The mineral extraction tax (MET), which is variable and dependent on oil prices, accounts for the main share of government revenues from the sale of oil and gas. The MET alone contributed 950 billion rubles ($10 billion) to the budget last month. Additionally, Russian oil firms paid an additional income tax (ATT) for the third quarter, adding another 593 billion rubles ($6.4 billion) to their revenue, marking an 18-month record.
It is also worth noting that, in October, oil producers did not receive damper payments for September due to a sharp surge in market prices for gasoline and diesel fuel in Russia. This has had a substantial impact on the budget, resulting in significant savings. Damper payments are made to refineries for supplying fuel to the domestic market at prices lower than those of exports. The absence of these payments has further contributed to the increase in Russia’s overall budget for October.
Overall, soaring crude prices have dramatically increased Russia’s energy revenues, with oil and gas sales reaching their highest level in over a year. These profits have been driven by a combination of factors, including the high prices of the Urals blend of crude and substantial tax contributions from oil and gas companies. Despite earlier expectations of a deficit, Russia’s energy exports have proven to be immensely profitable in recent months. This has provided a significant boost to the country’s overall revenue and economic outlook.