Oil deployed to the budget – Business – Kommersant

According to Kommersant, in the face of sanctions and a growing budget deficit, the government at a meeting on Saturday decided on new parameters of the tax system, which will be discussed by the State Duma on February 13. The authorities decided to fix the Urals discount to Brent when calculating oil taxes: from $34 per barrel in April, it will gradually decrease to $25 per barrel by July. In addition, the government will again reduce subsidies for the damper for gasoline and diesel fuel, which will bring about 25 billion rubles to the budget. per month. Since March, Russia will reduce oil production by 500,000 barrels per day in order to push up world oil prices.

Over the weekend, the government submitted to the State Duma a draft law on changing the parameters of the tax system for the oil industry. The fact that the government wants to change the quotes for calculating taxes in the industry (MET, VAT, export duty and reverse excise tax on oil), Kommersant has already reported. It was about tying Urals quotes to Brent, taking into account a fixed discount, which should force oil companies to either sell oil not lower than this value, or pay more taxes to the budget. Now the treasury, which expected an average Urals price of $70 per barrel this year, is largely losing revenue, as in December and January, after the entry into force of the EU embargo, the price of Urals fell below $50 per barrel.

According to several Kommersant sources, on February 11, Deputy Prime Minister Alexander Novak held the final meeting, during which they were to determine the size of the discount on Brent. As a result, the bill established a smooth decrease in the discount: from $34 in April, it would have to be reduced by $3 per barrel every month until it reached the target value of $25 per barrel in July. Kommersant’s sources said that the Ministry of Finance proposed a tougher option: $20 per barrel.

That is, oil companies are given several months to try to negotiate with Urals buyers to reduce the discount, otherwise they will have to pay more taxes to the treasury.

Reuters estimates that if a discount of $25 per barrel had been applied in January, the Urals tax price would have been $58 per barrel instead of $49, which could bring an additional 63 billion rubles to the budget. only on NDPI per month.

In January, the discount reached $40 per barrel, while the companies even increased production and exports, as the price was lost mainly by the budget. Oil companies are forced to sell Russian oil at a discount as the EU banned its purchase in an attempt to cut Russian revenues amid fighting in Ukraine. Simultaneously G7 countries introduced price ceiling for Russian oil and oil products by banning the provision of services for the transportation and insurance of Russian sea cargo if they are sold at a price above the ceiling (now it is set at $60 per barrel). So far, the ceiling itself has not had a significant impact on exports, as the price of Urals has been well below it. However, with Brent now at around $86/bbl and the discount set to fall to $25, Urals could hit the ceiling in the coming months.

At the same time, the Russian authorities are striving to increase world oil prices: February 10 Alexander Novak announcedthat Russia will unilaterally reduce production from March by 5% – by 500 thousand barrels per day. According to one of Kommersant’s interlocutors, oil companies will receive quotas proportional to production, as they already did under the OPEC + deal. Other participants in the OPEC + agreement at a meeting on February 1 decided not to change their quotas, which forced Russia to act independently. Now the Russian Federation is already producing about 600 thousand barrels per day less than its quota in OPEC + (it is 10.5 million barrels per day excluding condensate), since March, the overfulfillment of the quota will exceed 1 million barrels per day.

The government also decided to reduce subsidies to oil refining by cutting damper payments. The damper is received by refineries for deliveries of fuel to the domestic market, it is calculated as part of the difference between the export price of fuel and the fixed price of the domestic market. In 2022, oil companies received record subsidies in the amount of 2.2 trillion rubles. At the same time, the Ministry of Finance from September 2022 shortened damper for gasoline by changing the calculation of the export price and reducing it by the size of the Urals discount to Brent (since this year it has been fixed at $20 per barrel).

According to the new amendments, from April to June, the discount will temporarily rise to $25 per barrel, and then take on the same value.

Similar amendments will be made to the calculation of the damper for diesel fuel – there the Urals discount to Brent $10 per barrel will be applied, which will be valid until the end of the year.

This can bring an additional 17 billion rubles to the budget. for gasoline and 6 billion rubles. according to the diesel damper, respectively, evaluates one of the sources of “Kommersant” in the industry.

Such a “cautious” option was chosen, according to the interlocutor of Kommersant, in order to prevent a sharp increase in diesel fuel prices.

The decision of the authorities to firmly fix the size of the Urals discount and actually tie the collection of taxes to the global benchmark, apparently, puts an end to the immediate prospects of projects to create an alternative Russian benchmark. It also confirms the course towards maintaining the integration of the Russian oil industry with the world market.

Dmitry Kozlov