Page 18 - RusRPTOct22

is regaining control over its resource wealth. But Russia might have to cede that control once again, to China.
Russia is already competing with Saudi Arabia for the crown of China’s top oil supplier. And it is unclear whether China would be comfortable with expanding its already sizable energy relationship with Russia even further, especially if Power of Siberia 2 goes ahead as expected. Beijing has striven to have a diversified energy import mix, for security reasons. And Russia will not go ahead with an oil pipeline project without having a supply contract in place to cover most of its flow capacity.
It is also important to note that while Russia and China have come together in opposition to Western hegemony, their relationship continues to be characterised by some mistrust and suspicion. Namely, Russia is concerned about expanding Chinese influence in the Far East, and in Central Asia. In its energy war against Europe, Moscow has demonstrated its willingness to use energy supplies as a weapon, and this has likely alerted Beijing of the dangers of entrusting its energy security to the Kremlin.
2.6 Russian MinFin taps the gas and raw material sector raise RUB3 trillion to cover the budget deficit
Russia’s Ministry of Finance (MinFin) has come up with a plan to cover this year’s anticipated circa 2% of GDP budget deficit by increasing export taxes on the gas sector, Kommersant reported on September 19.
The MinFin plans for new taxes on nearly all raw material and fuel exports could all together raise an additional RUB2.4 trillion ($66.7bn) in 2022 and RUB5 trillion ($83.3bn) in the following three years, easily covering the anticipated budget deficits for the coming three year budget that will be passed by the end of this year.
Gas and oil export revenues tumbled in the last few months as the Kremlin reduces supplies to Europe as part of the economic war it is waging on the West.
The budget surplus the government had just before the war started in February has almost entirely evaporated. According to the results of the first six months of the year, the surplus, according to the Ministry of Finance, amounted to RUB1.374 trillion ($22.9bn).
This means that in July the deficit was RUB892bn. June was also in short supply - RUB121bn. Data for May is classified. In April, the first monthly budget deficit was recorded. That fell to a surplus of a mere RUB137bn ($2.3bn) in January-August, according to preliminary data from the Ministry of Finance.
The deficit comes as no surprise. In April Russian Finance Minister Anton Siluanov forecast that the budget would end this year with a 2% of GDP deficit as he said most of the spending on things like social support would come in the fourth quarter. The government had planned to spend up to 3% of GDP on
18 RUSSIA Country Report October 2022 www.intellinews.com