Page 60 - RusRPTAug23

6.1.2 Budget dynamics - specific issues...
The gas war with the EU has deprived Russia of $28B in revenue. The loss of the European gas market, which accounted for almost 80% of Gazprom's exports, will cost the Russian federal budget $28B in tax revenue this year, according to Vygon Consulting. Gazprom will lose about $90B in sales compared to last year's figure. Russian authorities will try to compensate for the lost revenues by increasing gas exports to China and the tax burden on Gazprom. However, only 22bn cubic metres are pumped through the Power of Siberia pipeline to China, which is one-eighth of what the EU bought before the war, and additional gas taxes will cover less than a quarter of the revenue lost from gas exports to Europe. According to Western media, Gazprom pumped only 12.1bn cubic metres of gas to Europe in the first half of the year. If this pace is maintained, the annual export volume will be about 24bn cubic metres, the lowest level in almost half a century.
Finance Ministry data suggests that the government is making cuts to the budget to narrow the deficit that ballooned at the beginning of this year.
In June, expenses were 1.74 trillion rubles ($19.8bn)—significantly less than last year’s expenses and more than 800bn rubles ($8.9bn) below revenues.
Revenues were boosted by non-oil and gas-related sources, including dividends from large state-owned companies like Sberbank and increased VAT revenues. Oil and gas revenues remained significantly (47%) lower than last
60 RUSSIA Country Report August 2023 www.intellinews.com