The share of oil and gas revenues in Russia fell below one-third throughout the first six months of 2020, reaching a low figure in the past few years, the Russian Audit Chamber wrote in a federal budget report.
"The country's oil and gas revenues accounted for 29.3 percent of the whole federal budget, marking a 13.9 percent drop on the year," the document reads. What do "oil and gas revenues" stand for? According to the country's finance ministry, these are mineral extraction tax revenues for oil and gas output, energy export duties, as well as profit-based hydrocarbon levy that refers to some deposits. Starting from 2005, the share of oil and gas revenues in the Russian federal budget ranged between 36 and 51 percent. Russia's finance ministry saw its projected drop in the ensuing years yet not at this pace. Under the three-year federal budget act, more than a third of oil and gas revenues will be injected into the budget by the end of 2022. So why have they seen a massive drop only recently? Audit Chamber officials linked it to a slump in export tax revenues for oil, gas, and petroleum products and MET revenues –– by as much as one third. The latter comes from a decline in oil output in line with what Russia had pledged while signing the OPEC+ cut deal. On the whole, the drop in oil and gas revenues to the federal budget is due to the decline in oil prices around the world, a slump in gas exports, as the result of mild weather and a shortfall in the EU economies, as well as a set of measures to mitigate the coronavirus crisis. Between December 2019 and May 2020, crude oil traded at $43.1 per barrel, compared to $65.2 a year before. Back in May, Alexei Kudrin, the head of the Audit Chamber, warned of a shortfall in the state's budget as a result of the coronavirus pandemic –– with far more modest oil and gas revenues. Even before the outbreak of the pandemic, there had developed a noticeable trend toward a reduced role of hydrocarbons in the global economy.