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Russia’s oil and gas budget revenue drops 64% in April

Flare, Light, Factory Reuters/Alexander Manzyuk
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Russia’s federal budget revenues from oil and gas, the lifeblood of its economy, fell 64 percent in April from the year-earlier period and declined by 5.9 percent from March, its finance ministry said, as a result of higher subsidies to oil refineries.

Budget income from oil and gas sales reached 647.5 billion roubles ($8.3 billion) last month, compared to 688.2 billion in March and 1.798 trillion roubles in April 2022, it said.

Subsidies from the budget to the refining companies from the oil reverse excise tax rose by 38 billion roubles to 79.3 billion roubles in April.

The same payments to oil refineries under the “damping mechanism” rose to 107.2 billion roubles from 96.7 billion roubles in March.

At the same time, profit-based tax revenues from oil producers fell last month to 185.4 billion roubles, from 220.6 billion roubles in March.

The Russian finance ministry plans to halve subsidies to oil refiners from July 2023 and is aiming to cut payments from the budget under the damping mechanism by 30 billion roubles.

Russia’s mineral extraction tax (MET) and export duty revenues rose in April from March by 6.5 percent, or 36.4 billion roubles, and by 13.5 percent, or 6.8 billion roubles, respectively.

The budget for 2023 foresees a deficit of two percent of GDP. The finance ministry has budgeted for a 23 percent reduction in oil and gas revenues this year to 8.95 trillion roubles.