Russian Oil and Gas Revenues Skyrocket in October, Eclipsing Previous Figures

MOSCOW: Russia's economic surge in the oil and gas sector became evident in October as revenues more than doubled, reaching a staggering 1.635 trillion roubles ($17.63 billion), compared to 739.9 billion roubles in September. The Finance Ministry unveiled this remarkable data on Friday, attributing the surge to a cyclical rise in profit-based tax.

The robust performance of the oil and gas industry, which has contributed over 28% of Russia's total budget proceeds thus far this year, marked a remarkable 27.5% increase compared to October 2022. This impressive growth is linked to the government's decision to temporarily suspend the so-called "damper payment" to oil refiners. It is worth noting that these payments were later reinstated after contributing to fuel shortages that prompted the government to impose a temporary ban on fuel exports on September 21, although this restriction has since been eased.

Despite the recent upswing, oil and gas revenues for the January to October period still registered a year-on-year decline of 26.3%, amounting to 7.211 trillion roubles. Russia's energy sector has faced the adverse effects of Western sanctions, including price caps and an embargo on seaborne oil exports. Additionally, the Nord Stream gas pipelines to Europe, which were sabotaged in September 2022, have not yet fully recovered, with investigations ongoing to determine the responsible party behind the attacks.

The Finance Ministry had originally budgeted for a 23% decrease in oil and gas revenues this year, setting the target at 8.86 trillion roubles. This projection coincides with an expected budget deficit of nearly 3 trillion roubles, equivalent to 1.8% of the gross domestic product (GDP).