The government has found a source of compensation for budget expenses for the damper

According to Kommersant, the government will soon introduce amendments to the State Duma on compensation of budget expenses for payments to refineries for supplies to the domestic market. Compensations for the damper mechanism were halved in September; by the end of October, it is planned to return to payments in full. Most of the costs for the damper are planned to be compensated by Gazprom, by increasing the mineral extraction tax on gas and gas condensate, since the gas company processes it at plants that receive the fuel damper.

The government approved amendments to compensate budget expenses for increasing the damper, Kommersant’s interlocutors told. According to it, oil companies will return full payments for the damper starting from October. Their reduction by half was applied only in September. According to the new amendments, sources tell Kommersant, it is proposed to increase the mineral extraction tax for gas condensate for Gazprom by applying a new coefficient Kkg. This is the Kabdt coefficient multiplied by 1.5, which characterizes surcharges for gasoline and diesel fuel and is used in the mineral extraction tax formula for oil. The largest processors of Gazprom’s gas condensate for the production of gasoline and diesel fuel are the Astrakhan Gas Processing Plant, the Surgut Plant and Gazprom Neftekhim Salavat. These plants receive a damper, but, unlike oil producers, do not pay a premium for condensate. According to the Federal Tax Service, the taxable volume of gas condensate production for 2022 amounted to 18.3 million tons. According to Kommersant’s sources, an increase in the mineral extraction tax on condensate for Gazprom could bring the budget an additional 70–80 billion rubles. in year.

The coefficient will not apply to structures that produce less than 35% of gas in the total production portfolio. We are most likely talking about Gazprom Neft. The government press service confirmed to Kommersant that the amendments were approved at a White House meeting and will be submitted to the State Duma.

Another innovation of the Ministry of Finance will be linking the amount of reverse excise tax subsidies to obligations for supplies to the domestic market. To receive a full subsidy, the company must supply gasoline and diesel fuel to the domestic market in an amount of at least 40% of the total production of light petroleum products. If not, then the subsidy is reduced by the Kvrk coefficient (390 rubles per ton of refined oil for tax periods in January-August 2024, 250 rubles per ton starting from September 2024). These requirements will not apply to companies where the Russian Federation’s share is more than 25%, that is, Rosneft, Gazprom structures (including Gazprom Neft). The risk of a reduction in subsidies will primarily affect the Kirishi Oil Refinery of Surgutneftegaz, which before the ban on fuel exports sent most of its products for export, as well as TAIF, Volgograd (LUKOIL) and Tyumen Oil Refineries (Rusinvest).

According to Kommersant’s source, for these four plants the subsidy would have decreased in total by about 1.5 billion rubles. per month.

Last week, the head of the Ministry of Energy Nikolai Shulginov mentioned that additional costs for the damper could be covered by increasing the tax burden on gas workers, as well as through “fairer taxation of export-oriented refineries.”

According to Kommersant’s interlocutors, the Ministry of Finance took into account part of Rosneft’s proposals in the project. Initially, the ministry planned to cover part of the shortfall in revenue from increasing the damper by increasing the mineral extraction tax on gas. However, Rosneft remained dissatisfied with the fact that the mineral extraction tax on gas for it was increasing more than for Gazprom. The company proposed not to increase the mineral extraction tax for gas, which is used for the needs of the energy sector and housing and communal services. This proposal has been approved. According to the new amendments, it is proposed to introduce two additional coefficients into the calculation of the mineral extraction tax – Kkg2023 (applies only to volumes of gas supplied to industrial consumers, introduced from January 1, 2024) and Kkg2024 (introduced from August 2024). The volume of gas for thermal power plants, housing and communal services enterprises and the population is taken into account only in the Kkg2024 coefficient, but its impact on the size of the mineral extraction tax will be ten times less than Kkg2023.

Apparently, Gazprom is expecting a new significant increase in taxes, including on the “oil” component, believes tax expert Boris Lutset. But, unlike the reduction of the damper (which was planned until 2027), such compensation may turn out to be indefinite – then it will be another “asymmetrical” tax decision. The increase in the mineral extraction tax on gas for Gazprom and independent producers was planned from the very beginning, recalls Mr. Lutset. However, if the design changes, instead of the previously proposed “specific” rates for all gas production, an “ad valorem” element of the mineral extraction tax may be proposed, which will be a percentage of revenue from gas sales in the Russian Federation. At the same time, the approach (to which Rosneft previously objected) may be retained, in which the size of the mineral extraction tax for independent producers will still increase more than for Gazprom. But we can still talk about some kind of compromise, when the formal differentiation will remain, but will not be as significant as in the text of the first reading, concludes Boris Lutset.

According to Sergei Kondratyev from the Institute of Energy and Finance, additional revenues from the mineral extraction tax on gas will amount to 65–70 billion rubles, including 33–35 billion rubles. from Gazprom, and the high share of independent producers in payments is associated with a larger share of gas sales to industrial producers.

Dmitry Kozlov, Tatiana Dyatel