Russia will raise the export tax paid by its oil producers in September to the highest level this year, boosting state coffers as the country’s crude price rises.
The government plans to raise oil export duties to $21.40 a tonne next month, more than a quarter higher than in August, the finance ministry said in a statement on Tuesday. That equates to about $2.92 a barrel.
Oil taxes are a key source of revenue for Russia, which is seeing its budget strained by rising costs to finance the Kremlin’s war in Ukraine and Western sanctions on the economy. Crude oil prices have risen globally amid supply cuts by the OPEC+ alliance and robust demand. Russia, one of the leaders of the group of producers, plans to keep its exports down next month.
Those factors have helped push the price of Russian crude above the $60-a-barrel threshold set last year by the Group of Seven nations, an effort to limit the flow of petrodollars to Moscow while keeping the global oil market supplied.
The country’s flagship Urals blend averaged $70.33 a barrel in the July 15-August 14 tracking period, with its discount to global benchmark Brent narrowing to $13.90, according to the Ministry of Finance.
The export tax is just one of several taxes paid by the country’s oil industry and represents a fraction of total oil revenue as Russia completes a multi-year tax reform. Moscow is gradually shifting the tax burden on oil production, away from shipments abroad, and plans to abolish export duties by 2024.
Still, the US dollar tax increase, combined with a weaker ruble, should help offset lower Russian crude oil sales in September while boosting budget revenue. The Russian currency has been the third-worst performer among its emerging market peers this year, falling 25% against the dollar.
For the rest of the year, Russia’s additional revenue from oil and gas sales will reach about 800 billion rubles ($8.1 billion) above the budget baseline amid higher prices, wrote Maxim Oreshkin , chief economic adviser to President Vladimir Putin, in a column published Monday by the state news agency Itar-Tass.
