Page 11 - FSUOGM Week 05 2023

FSUOGM POLICY FSUOGM

Russian budget revenues slump 46%

year on year in January

RUSSIA RUSSIAN budget revenues from oil and gas $53.60 per barrel.
slumped 46% in January versus the same month Russia is mulling whether to tax its oil firms
Lower prices and lower last year, as sanctions and other political fallout based on the price of Brent instead of Urals to
volumes of oil and gas from Moscow’s invasion of Ukraine took their help shore up the budget, the Moscow-based
exports are starting to toll. Kommersant newspaper reported last week,
have an impact. National budget revenues from energy sales, citing sources. The government is also looking
including taxes and customs revenues, plunged at ways to reduce Urals’ steep discount to other
last month to their lowest level since August benchmarks. At the end of January, Russian
2022, according to Finance Ministry data com- President Vladimir Putin instructed the govern-
piled by Reuters. ment to file within a month proposals to change
Sanctions and rejections from Western buy- the methodology for calculating how much tax
ers caused the price of Russia’s flagship Urals is paid on oil exports, according to Kommersant.
grade to drop 42% year on year in January, as its The Finland-based Centre for Research on
discount to Brent widened to an historic extent – Energy and Clean Air estimated in a report last
at times as much as $40 per barrel. Urals has been month that the EU oil ban and price cap was
trading at a widened discount since the war in costing Russia some $174mn per day. And the
Ukraine began, although further pressure came loss is expected to widen to $304mn per day
in early December, when the EU and G7 intro- following the introduction of a similar embargo
duced an embargo and price cap on seaborne and price caps on Russian petroleum products
Russian oil exports. on February 4.
Urals was priced on average at $49.48 per bar- Meanwhile, Russia’s Gazprom has drastically
rel in January, which was 1.7 times lower than cut pipeline gas exports to Europe over the past
in the same month of 2022, when it averaged year. As of January, shipments were 11% below
$85.64 per barrel. Russia calculates the export the level that they were a year earlier. While soar-
duty owed to the budget based on the price of ing wholesale gas prices earlier were more than
Urals. compensating for the volume loss, those prices
As of early February 3, Brent was trading at are now lower than they were before Moscow
$82 per barrel, while Urals was selling for only started its invasion of Ukraine. ™

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