... accelerated price growth at gas stations will continue for AI-98 and higher grades of gasoline. A serious threat to the fuel market, however, is the current drop in oil prices, which could prompt the Ministry of Finance to reduce subsidies under the damping mechanism (compensating part of oil companies’ costs from the budget for supplying fuel to the domestic market at prices below export levels). The expert recalls that a previous attempt to cut subsidies in July 2023 led to a rally in the fuel ...

... gradually increasing, although the rate of growth has slowed compared to peaks in June. To stabilize the situation, the government is also utilizing budgetary mechanisms. In particular, oil refineries (refineries) are receiving compensations under the damping mechanism—subsidies that mitigate the difference between high world prices and fixed domestic fuel prices. In July, the volume of damping payments rose to a record ~60 billion rubles, helping curb the price increase of gasoline for end consumers....

... oil companies lost this indirect subsidy, but at the same time, excise tax rates have significantly increased, Tereshkin clarifies. At the same time, some experts believe that the stimulation of oil refining continued through the operation of the damping mechanism—a compensation for oil companies from the budget covering part of the price difference between the European and Russian markets. The damping mechanism has been operating in the Russian market since 2019. Translated using ChatGPT ...

... Sources of Oil and Gas Revenues Oil and gas revenues are derived from mineral extraction tax (MET), additional income tax (AIT), and export duties. However, these are reduced by the amount of reverse excise payments to oil companies, factoring in damping and investment premiums. The largest share of oil and gas revenues comes from MET collections. In 2022, MET accounted for 71.7% of oil and gas revenues (excluding reverse excise payments), rising to 80.7% in 2023 and 83.5% for January–September ...

... diversification and the development of domestic resources to ensure sustainable economic growth. "Subsidies" to Russian Refineries Increased by Over 80% in the First Seven Months of 2024 In the first seven months of 2023, payments under the damping mechanism, reverse excise tax, and investment allowance amounted to 1.21 trillion rubles. For the same period in 2024, these payments reached 2.19 trillion rubles, reflecting an increase of over 80%. However, despite the rise in tax deductions,...