Oil companies received record damper payments from the budget in July

Payments to oil refineries from the budget under the damper mechanism in July 2023 became the highest since the beginning of the year, follows from the data of the Ministry of Finance. They amounted to 110.4 billion rubles. against 78.6 billion in June (+40%). Compared to July 2022, the volume of payments fell by 2.2 times. In January-July this year, the oil industry received a total of 653 billion rubles from the budget, which is 2.3 times less than in the same period last year.

The main purpose of the damping mechanism is to contain the growth of prices for motor fuel within Russia. It provides that at higher export prices for petroleum products compared to conditional domestic prices (a certain level is set every year), refineries receive payments from the budget. This allows companies to compensate for lost profits and continue to supply fuel to the domestic market. In the reverse situation, the oil companies themselves must make contributions to the budget.

In 2022, against the backdrop of increased sanctions and the announcement of an embargo on fuel imports from Russia to the EU, export prices for petroleum products rose sharply. As a result, Russian companies received record damper payments of RUB 2.2 trillion, 3.2 times more than in 2021.

In 2023, the decrease in the total amount of payments is due, among other things, to the adjustment of tax legislation. In the fall of 2022, a discount for Urals oil in relation to the reference Brent of $20/bbl was introduced into the formula for calculating the damper for gasoline. From April 1, 2023, the formula was changed once again: the discount was increased to $25/bbl, and the calculation of damper payments for diesel fuel was also tied to the discount amount. According to Petromarket estimates, this led to a decrease in the total amount of funds received by oil product manufacturers in April 2023 by 26.5 billion rubles, Interfax reported.

At the end of April 2023, Finance Minister Anton Siluanov announced that the Finance Ministry plans to cut fuel damper payments again. This time, a factor has been added to the formula that should cut them in half. According to the Ministry of Finance, this will allow the budget to save about 30 billion rubles. monthly. According to Siluanov, now these deductions “go to the margin of oil refiners,” which needs to be stopped. The new damper formula will work from September 1 this year.

Fuel damper payments rose in July against the backdrop of rising world oil prices, a reduction in the Urals discount, as well as a seasonal increase in fuel demand in the domestic market, explains Igor Yushkov, a leading analyst at the National Energy Security Fund. The rise in oil prices in the world and the devaluation of the ruble together made the export of petroleum products more profitable than sales in the domestic market, the senior analyst added.BCS investment world” Ronald Smith.

Yushkov recalls that last month, according to the Ministry of Finance, the average cost of Urals for the first time this year exceeded the ceiling of $60 and amounted to $64.37 per barrel. At the same time, Brent quotes rose to $85/bbl in July. for the first time since April of this year. As of August 3, Brent is trading at $84.28/bbl.

In August, payments to oilmen from the budget may also be quite high – their size will depend on world oil prices and the discount on Urals, Yushkov adds.

In recent months, the authorities in the Russian Federation have been actively trying to stop the growth of wholesale gasoline prices. From April 10 to July 24 this year, the cost of AI-92 on the SPIMEX exchange increased by 41% and reached a maximum of 64,879 rubles/t, the price of AI-95 increased by 35.8% to a peak of 69,925 rubles/t. The rise in prices was gradually translated into retail: according to Rosstat, from July 24 to July 31, the cost of a liter of AI-92 and AI-95 increased by 0.5% to 49.44 and 53.97 rubles. respectively.

Against this background, the Ministry of Energy, the Federal Antimonopoly Service and Deputy Prime Minister Alexander Novak began to work out measures to reduce wholesale prices in the domestic market. In particular, on August 2, a resolution was signed to increase the standard for exchange trading in gasoline and diesel by 1 percentage point to 13 and 9.5%, respectively. The departments are also considering quotas for the export of petroleum products and the creation of a list of white fuel exporters.