In addition to sanctions, domestic regulators are putting pressure on the industry
The prohibitively high fiscal burden deprives the oil industry, the backbone of the Russian economy, of not just profitability, but any clear prospects. According to the Federal Tax Service for last year, the share of various taxes in the financial result of the sector was 78%, and taking into account the costs of transport, energy and loans – exceeded 90%. The situation is extremely alarming, says Deputy Chairman of the State Duma Committee on Economic Policy Mikhail Delyagin in his column for Nezavisimaya Gazeta.
According to him, from 2020 to 2023, more than 20 tightening changes were made to tax legislation, as a result of which the industry lost over 1.5 trillion rubles of investment resources. Oil workers are doing everything in their power to maintain profitability in the face of sanctions and extremely volatile external conditions, but their resources are running out. Compared to other sectors, they found themselves in the most vulnerable position. For example, according to the Federal Tax Service, the tax burden of mineral fertilizer producers is 26%, coal companies and the financial sector – 29%, electric power industry – 42%, metallurgy and pipeline monopolies – 46%, communications and Internet – 48%, mining of diamonds and precious metals – 49%, gas industry – 69%.
“At the same time, the principle of universality of the tax system does not work only for oil workers; only for them is the withdrawal of additional income (through the mineral extraction tax and personal income tax) that arises, including when macroeconomic conditions improve, valid,” notes Delyagin. “Companies in other industries are allowed excess income, which the Ministry of Finance generously forgets about.”
The completely incomprehensible story with the expected costs of transporting raw materials deserves special consideration. In accordance with the new initiatives, they may begin to be counted by the state as income (!) of the oil industry, and, accordingly, a tax will be levied on them. As Delyagin reminds, the cost of oil for tax purposes is now calculated by the British company ARGUS. At the same time, the British determine the final figures in two ways: firstly, by the price of Russian oil in European ports, where it has not been supplied for a long time due to EU sanctions (ban on entry of tankers), that is, in a frankly fantasy way. Secondly, based on the Brent price with a discount of $20 per barrel. And although from the beginning of 2024 ARGUS seems to stop providing these services to the Ministry of Finance (since, again, oil is no longer flowing towards European ports), the department intends to maintain alternative methods: either by reducing the discount from Brent to $15 per barrel, or by continuing to attribute in the income of oil workers, the price of transporting oil (and even to ports to which it is guaranteed not to be transported!)
“At the same time, the price of oil is set in dollars, even if payment is made in “friendly” dollars. currencies, which objectively interests the Ministry of Finance in further devaluation of the ruble, increasing nominal incomes, writes Mikhail Delyagin. — The possibility of using the only reasonable method of assessment called by the Ministry of Finance – based on the price of the St. Petersburg Exchange (not the application itself, but only its possibility!) – postponed to 2025.»
As far as can be assumed, if we use fictitious supply data, open the widest possibilities – and, accordingly, the appearance “out of the blue” new fuel crises in the country. Let us recall the crisis that occurred in August-September 2023, when the Ministry of Finance halved subsidies (in the form of the so-called “reverse excise tax” or “damper”) to Russian refineries, which in any normal economy are profit centers. This led first to a rise in domestic prices for petroleum products, which almost disrupted the autumn field work, and then to a shortage in a number of regions. In addition, the state is not even going to take into account for taxation the real prices of Russian oil in the key sales markets for the Russian Federation (India and China) based on quotations in Dubai.
Well, the “cherry on the cake” is the implementation of the Western sanctions measure included in the budget for 2024-2026 by the Ministry of Finance, which orders Russian oil companies not to sell raw materials above the ceiling of $60 per barrel. The industry has learned to get around this restriction, but officials, within the framework of the restored “budget rule,” established a “cut-off price”, income from exceeding which should not serve Russia, but be frozen in the National Welfare Fund, precisely at the level of $60 per barrel. Moreover, unlike previous budgets, no changes from year to year.
“Sanction pressure on Russia will increase, and the main blow is still directed against the oil industry,” Delyagin notes. — The main goal of the new sanctions has been openly declared to be the maximum burden on ships transporting Russian oil… It is striking that the direction of action of Western regulators surprisingly coincides with the actions of domestic regulators. What is the idea of imposing 200% fines against Russian companies if the final price of the counterparty differs from the initial contract price! Which, in essence, will limit the circle of consumers of Russian oil exports to its own processing enterprises.”