Oil and gas budget revenues have been declining since April this year. The maximum income to the treasury of the industry was recorded in March – 688.2 billion rubles. In June, oil and gas revenues amounted to 528.6 billion rubles.
According to the group’s analysts, the drop in oil and gas revenue from the Russian budget by almost half compared to last year can be explained by several reasons. First, there was a decrease in world oil prices, including the Urals brand, the average price of which in January-June 2023 lost 38% and amounted to $52.17 per barrel. Second, Russian oil production fell by 9.7%, or to 9.5 million barrels per day (from 10.52 million barrels per day in 2022). Third, last year’s numbers were very high. Budget revenue for the first half of 2022 increased by 70%. Fourth, due to Western sanctions, oil exports have more than doubled to 1.6 million barrels per day, negatively affecting the value of customs duties. The fifth reason is the high discount of Russian oil to world oil prices, which is explained by problems with insurance and logistics, as well as an increase in delivery time.
It will be difficult to recover markets lost from oil sales sanctions in the coming years, experts say. As for oil exports to India and China, they will always be discounted due to shorter delivery times and better terms offered by competitors, including those from the US, the Middle East and Australia.
It is not possible to increase oil production in the face of reduced Russian exports, so the only way to increase budget revenues from oil and gas in the face of low oil prices is ruble devaluation.
As for the gas industry separately, the increase in MET revenues last year was facilitated by the high volatility of spot gas prices, when they moved in the range of $1,000-3,000 per thousand cubic meters. , which led to an increase in average world prices by more than 2.7 times. In addition, part of the revenue received by Gazprom from the high prices, namely 1.248 trillion rubles, was withdrawn by the government in 2022 in the form of a lump sum payment to cover the growing budget deficit. This year the situation has radically changed: world gas prices have returned to the level of 300-600 dollars per thousand cubic meters, which will last at least until autumn. The additional payment for the MET is fixed and amounts to 50 million rubles per month, or 300 million rubles per year. Most likely, prices will rise again in the fall, when preparations for the heating season begin, but, nevertheless, Gazprom’s MET receipts will remain lower than last year, and it may not be repeated. the emotion that was observed then.
Of course, there is the possibility that the government will once again try to make up the budget deficit by stripping away the windfall profits of state corporations. But the profitability of companies in the oil and gas industry, as those most affected by the sanctions, remains low, according to Business Profile.