The price of Russian oil, used to calculate taxes, is on average about 60% higher than the level set in the country's federal budget. In the first three weeks of October, the value reached an average of 8,699 rubles, or $ 103.4 per barrel. This is about 11% more than the average price in September, Reuters reports.
If oil prices and the ruble exchange rate hold until the end of the month, the average tax price for October will be 8,387 rubles, or $ 100.2 per barrel. This would be the highest level since March 2022.
Oil exceeds budget bill
To calculate budget revenues, the Russian government has set a price of $59 per barrel and an exchange rate of 92.2 rubles per dollar. The combination of the two indicators gives a base value of 5,440 rubles per barrel. Thus, the October price of 8,699 rubles is approximately 60% above the budget level.
Reuters points out that “this provides support for state finances“, as the higher price of the raw material increases revenues related to oil taxation.
The growth occurs against the background of the increase in oil prices on world markets. The war in the Middle East and the associated supply disruptions keep prices above $100 per barrel. For the Russian crude, the impact on the budget depends not only on the dollar price but also on the ruble exchange rate.
The deficit remains under pressure
The higher tax price on oil comes at a time when Moscow expects a budget deficit of 3% of gross domestic product in 2026. This is almost twice the original target and is more than the deficit reported in the previous year.
The Russian government has increased taxes in order to finance the costs of the war in Ukraine. The initial plan called for the deficit to be reduced from 2.6% of GDP in 2025 to 1.6% in 2026. Instead, for the period January-August it has already reached 2.5% of GDP.
Thus, the higher price of Russian oil provides additional revenue to the budget, but does not change the fact that public finances remain under pressure due to increased spending and a larger-than-planned deficit.
Sources: focus-news.net, investing.com, au.marketscreener.com