Oil and gas revenues of the budget were less than expected

The receipt of oil and gas revenues deviated from the plan, Finance Minister Anton Siluanov said at a meeting with the president. According to him, so far the budget from the sale of oil and gas receives less than expected. “Revenues not related to oil and gas are growing as planned. We expect that there may even be a small plus in non-oil and gas revenues for the year. But the problems are with oil and gas revenues. So far, we see that, taking into account the market situation, taking into account discounts, they are lagging behind the plan,” the minister explained.

The total amount of oil and gas revenues expected in 2023 is 8.9 trillion rubles, of which the so-called basic ones are 8 trillion rubles. This value is set by law and affects the amount of budget expenditures – even if less than 8 trillion actually goes to the treasury, this will not affect budget spending in any case. The rest is just over 900 billion rubles. – additional oil and gas revenues that can be used to replenish the National Welfare Fund under the budget rule.

In January-April, the Ministry of Finance received almost 2.3 trillion rubles. oil and gas revenues, which is two times less than in the same period in 2022, the agency reported. The total amount of shortfalls relative to the base level of income for the first four months exceeded 400 billion rubles, follows from the data of the Ministry of Finance.

The hardest hit were revenues from export duties on gas sales. The amount of this type of income amounted to 172 billion rubles. – 4.5 times less than in January-April 2022. Then the budget received 760 billion rubles. income from gas export duties. Most of all, in January-April 2023, the budget received in the form of MET for oil production – 1.7 trillion rubles. Revenues from the gas industry are almost 7 times lower – 253 billion rubles. In 2022, the difference was even greater – 3.4 trillion rubles. oilmen and 400 billion rubles. at the gasmen.

Damper compensations to oil workers have also changed significantly. For the first 4 months, they were reimbursed 360 billion rubles. from the budget. A year earlier, the amount was more than twice as high – 800 billion rubles.

The federal budget in January-April, according to preliminary data from the Ministry of Finance, was executed with a deficit of 3.4 trillion rubles. Over the past month, this figure has grown by 1 trillion rubles. from 2.4 trillion in the first quarter. In general, a deficit of about 2.9 trillion rubles is planned for the year. Thus, according to the results of four months, it is ahead of the forecast for the whole year.

The main reasons for the decline in oil and gas revenues of the budget are the fall in gas exports and prices for it, said Sergey Suverov, investment strategist at Arikapital Management Company. “Even despite the revision of the damper and sanctions restrictions, the oil industry is more or less within the planned indicators due to the fact that companies have managed to restructure supplies to the new realities. As for gas, the situation is less rosy,” says Suverov.

In his opinion, in the coming months, the situation with oil and gas revenues of the budget will improve, but again thanks to the oil sector: due to a decrease in the discount in the price of Urals to Brent and the devaluation of the ruble, oil and gas revenues will increase relative to current levels, Suverov believes. According to the analyst, payments for the damper may be reduced after adjustments are made to the Tax Code (the Ministry of Finance proposes to reduce payments for the fuel damper by 2 times during the year – from July 2023 to July 2024 – Vedomosti). But a significant factor of uncertainty, he said, will be the price of oil.

Oil and gas revenues are only 25.5% of the plan for the year. This is a significant reduction against the backdrop of low oil prices and a decrease in the physical volume of oil and gas production and exports, agreed Sergey Konygin, Senior Economist at Sinara Investment Bank. At the same time, gas exports in rubles fell much more significantly than oil, he admitted.

“Gazprom» in 2023 has not yet disclosed operating performance and the average gas export price. At the same time, spot gas prices in Europe have been declining since the second half of 2022. On May 17, June futures on the TTF hub in the Netherlands were trading at $360 per 1,000 cubic meters. m, which is two times lower than in May last year, according to the ICE exchange. Gas exports from Russia dropped sharply in spring-summer 2022. According to Vedomosti’s calculations based on data from the European Network of Gas Transmission System Operators (ENTSOG), at the end of April of this year, Russian gas supplies to Europe fell to 75.5 million cubic meters. m per day against 270 million cubic meters. m in the same period in 2022.

According to the Ministry of Finance, the average price for Russian Urals oil in January-April 2023 was $51.05/bbl, which is 40% lower than in January-April 2022 ($84.68/bbl). In April, the price was $58.63/bbl, which is 17% less than in April 2022. Oil exports are not significantly reduced. According to the International Energy Agency (IEA), in April 2023, the export of oil and oil products from the Russian Federation amounted to 8.3 million barrels per day, which was the highest figure since the beginning of the NWO in Ukraine at the end of February 2022. Crude oil exports decreased by 200,000 barrels per day compared to April 2022 to 5.2 million barrels per day, exports of petroleum products increased by 500,000 barrels per day in annual terms.

The lagging of oil and gas revenues from the plan was the result of a weak conjuncture on the world oil market and Urals discounts relative to Brent, said Alexander Potavin, an analyst at FG Finam. In fact, according to the results of four months, the reduction in budget revenues already exceeds the forecast for the whole year, he noted. At the same time, the government may begin to develop new ways to replenish the budget, which can reduce the profits of companies, he does not exclude.

For example, the analyst recalls, the possibility of reducing the damper subsidy for oil workers is now being considered. If this decision is approved, oil companies will pay more to the budget than receive reimbursement. New initiatives of the Russian Ministry of Finance to halve the level of the fuel damper from July 1, 2023 to June 30, 2024 may have a significant impact on the economy of Russian oil refining, Potavin added.

As a result of such an adjustment in the level of state support for oil refining, payments to oilmen from the budget for the damper will decrease by 30 billion rubles. per month. In the context of a significant decrease in the export profitability of the industry, this may lead to increased pressure on domestic prices for petroleum products in the direction of their increase already in the third quarter of 2023.

Taking into account the average exchange rate in 2023 at the level of 81.5 rubles per dollar and the average Urals price of about $60/bbl, the shortfall in budget oil and gas revenues by the end of the year will be moderate (500–800 billion rubles), said Denis Popov, chief analyst at PSB . The backlog in the collection of oil and gas revenues is primarily due to a decrease in oil and gas production. The negative impact of the price factor (low selling prices for Russian raw materials) is limited by the realized weakening of the ruble (the average annual Urals price of $70/bbl was included in the budget plan), he added. “According to our estimates, oil prices will be 14% lower at the end of the year, while our forecast for the average ruble exchange rate is 19% higher than the budgeted 68.3 rubles/$,” Popov said. In the second half of the year, the situation with oil and gas revenues of the budget, according to his forecast, will improve, most of the current backlog in fees will be made up.

Budget revenues for four months amounted to 7.782 trillion rubles, which is 22% lower than the volume of receipts for the same period last year, while non-oil and gas revenues grew by 5% year-on-year to 5.5 trillion rubles, oil and gas continued to decline – by 52%, up to 2.282 trillion rubles. At the same time, the Ministry of Finance noted that “the monthly dynamics of oil and gas revenues is gradually entering a stable trajectory corresponding to their base level (8 trillion rubles a year)”.

Expenses in January-April amounted to 11.206 trillion rubles, exceeding the figures for the same period last year by 26%. According to the ministry, the monthly dynamics of expenditure execution has slowed since March (+3.9% y/y, a month earlier it was +4.2% y/y) after accelerated financing in January-February of certain contracted expenses. Based on the figures for January-March, expenditures in April amounted to 3.129 trillion rubles. (in March they were at the level of 2.333 trillion rubles).

According to the budget law, federal budget revenues in 2023 are planned in the amount of 26 trillion rubles, expenses – 29 trillion, and a deficit – 2.9 trillion rubles.