Russian oil companies receive 158.1 bln rubles from budget for fuel damper in June, 201.7 bln rubles in May

MOSCOW. July 3 (Interfax) - Russian oil companies received payments totaling 158.1 billion rubles from the budget for the fuel damper in June, the Finance Ministry said in materials on forming and utilizing additional oil and gas revenues from the federal budget, as posted on its website.

Damper payments totaled 201.7 billion rubles in May. Oil companies received 986.9 billion rubles overall from the budget for the fuel damper in January-June.

The budget pays a damper as a subsidy to oil companies so that they rein in domestic fuel prices while export netbacks are high.

Oil companies also received excise tax payments on petroleum feedstock from the Russian budget in June in the amount of 150.6 billion rubles; in January-June, payments on this excise tax amounted to 807.3 billion rubles. The reverse excise tax on oil is a measure to support the oil refining industry. It involves a tax deduction for excise duty on oil depending on the volume of fuel production, the region where a refinery is located, and takes into account refinery upgrades and other elements.

Russia's Finance Ministry defends damper, which it says continues to play a positive role for the domestic market of petroleum products. Gasoline prices on the domestic market would be 20 rubles per liter higher in the current conditions without the damper and reverse excise tax, Finance Minister Anton Siluanov has said.

Changes to the calculation of maximum prices for fuel dampers is being discussed inside the Russian government, Russian Deputy Prime Minister Alexander Novak has said: the Finance and Energy ministries are studying proposals to separate calculations for exceeding the price limit separately for gasoline and separately for diesel fuel.

However, if wholesale fuel prices in Russia become too high and deviate on average per month from those established in the Tax Code (58,650 rubles per tonne for gasoline and 55,000 rubles for diesel fuel) by more than 10% for gas and 20% for diesel, the damper is not paid for that month.

This has happened only once, at the height of the price crisis in 2023: oil companies did not receive a fuel damper from the budget in September that year since the average exchange prices for petroleum products that month turned out to be much higher than the cutoff, after which the damper is reset to zero.

Fuel damper payments for 2023 totaled 1.588 trillion rubles; for 2022, they totaled 2.171 trillion rubles and for 2021, they totaled 674.5 billion rubles. Due to market conditions, oil companies paid 356.6 billion rubles to the budget for fuel dampers in 2020, while in 2019, the budget paid oil companies 282.2 billion rubles in damper payments.