Kommersant: the government was frightened of losses from oil sanctions and hastily prepares tax reform

Oil sanctions of the coalition of Western countries cause serious concerns in the Russian government, which faced a sharp drop in oil revenues due to the “ceiling” of prices for Russian oil and the oil embargo of the European Union. The new sales system turned out to be inappropriate for the Russian authorities - they cannot objectively assess the cost of Russian oil in Russian ports, and therefore accrue adequate taxes. It was this problem that became the key to the government, in order to increase tax returns, the authorities consider the implementation of the next reform. This was written by Kommersant with reference to sources in the market and in the government.

The problem is largely rested with the quotation of the Russian Urals oil variety, Western countries were the main buyer of Russian oil before the sanctions, and the Argus agency was engaged in the formation of the cost of quotation. The quotation was formed as the average from the cost of purchase and sale in Russian ports - the agency interviewed sellers and buyers, after which it made calculations and transmitted information to the Ministry of Finance, which made tax calculations on the basis of these data.

The difficulty is that after the outcome of European consumers, new buyers of Russian oil are shared by information about transactions extremely reluctantly, and conclusions made exclusively on the basis of analysis of the vacation price led to the market that the Ministry of Finance began to suspect Russian oil companies of intentionally understatement of kitchenings in order to reduce tax payments to the budget. Given the record budget deficit and income reduction of the oil industry, for the government, one of the key tasks becomes for the government. In December, revenues from the tax industry to the budget fell by 10% and amounted to 474.8 billion rubles, and the divergence of revenues with the plan forced the Ministry of Finance to enter the market and sell the currency from reserves in the amount of 54.5 billion rubles.

The budget for 2023 turned up with the basic price of oil of $ 70 per barrel, while the market price for Urals oil is now approximately $ 50 per barrel (in December a little higher, in January - a little lower). The government expects to receive about 8.9 trillion rubles of oil and gas revenues in 2023, of which 80% falls on the NPP (mining tax) for oil. KUPT analyst Daria Shorina admits that if a discount on Russian oil remains around 50%, then the budget will monthly undergo 250 billion rubles (3 trillion rubles a year).

The Russian authorities expected that sanctions would lead to a reduction in oil production and exports from Russia, which should support oil quotes and, accordingly, the Russian budget. Deputy Prime Minister Alexander Novak spoke of a decrease in production in 2023 by 5–7%, the budget has a drawdown by 8.5%. However, at the moment this did not happen - production is held at about the same level for several months - in the region of 1.48 million tons per day. Therefore, now the government intends to get rid of the quotes on Urals and form tax revenues from the generally accepted Brent quotation.

As planned by the government, this should force Russian oil companies to raise vacation prices in order to maintain the margin of business - because now the tax will be higher, since Brent prices are higher and more stable, and the income of companies in sales with a large discount will not be so large. The problem for the market is that the state is getting closer to the directive dictatorship of vacation prices, however, at the moment, only the size of the discount and the cost of the freight of the vessels are discussed. However, in the future, sources of the publication admit that Russia will simply switch to a single export operator of oil, as is done in other sanctions autocracies - Iran and Venezuela.

Discount and freight targeting, according to the authorities, stimulates Russian companies to reduce discount and increase the cost of Russian oil, while tax revenues will become more stable, as they will depend on the global market. However, experts believe that the positive effect is not obvious: in addition to the risk of total state control over oil export, this may lead to a reduction in production and export levels. In this situation, Russia risks losing its sales markets, losing to their competitors, but will be able to win in money due to the growth of oil prices.