Russian oil cos receive 142.5 bln rubles under fuel damper subsidy in July, down from 158.1 bln rubles in June

MOSCOW. Aug 5 (Interfax) - Payments from the Russian budget to oil companies under the fuel damper subsidy totaled 142.5 billion rubles in July, materials on the generation and use of the federal budget's additional oil and gas revenues posted on the Finance Ministry website showed.

Damper payments to oil companies totalled 158.1 billion rubles in June. Oil companies received a total of 1.129 trillion rubles from the budget under the damper mechanism in the first seven months of 2024.

The government pays the damper to oil companies as a subsidy to hold down domestic fuel prices when there is a high export netback.

Oil companies also received 134.5 billion rubles from the federal budget in payments for the excise on oil feedstock in July, with these payments totalling 941.8 billion rubles in the first seven months of the year. The reverse excise on oil is paid as a measure to support the oil refining industry. It provides a tax deduction for the excise on oil depending on fuel production volumes and the region where a refinery is located, and factors in modernization of the refinery and other components.

It was reported earlier that the Finance Ministry supports the fuel damper as it continues to play a positive role for the domestic oil product market. Finance Minister Anton Siluanov said that, in the absence of the damper and reverse excise, domestic gasoline prices would be 20 rubles per liter higher in the current circumstances.

However, Deputy Prime Minister Alexander Novak said that the authorities are discussing changing the calculation of maximum prices in the fuel damper. The Finance Ministry and Energy Ministry are considering proposals to calculate the amount by which maximum prices are exceeded separately for gasoline and diesel fuel.

Under the Tax Code, if fuel prices within Russia increase too much and deviate from the conditional prices of 58,650 rubles per tonne for gasoline and 55,000 rubles for diesel by more than 10% and 20%, respectively, on average for the month, the damper is not paid for that month. There has been one such precedent so far, at the height of the fuel price crisis last year, when oil companies did not receive the fuel damper in September because average exchange price for oil products in the month were far higher than the cut-off price after which the damper falls to zero.

Payments on the fuel damper totalled 1.588 trillion rubles in 2023, 2.171 trillion rubles in 2022 and 674.5 billion rubles in 2021 and 282.2 billion rubles in 2019. In 2020, oil companies paid the government 356.6 billion rubles under the damper due to the market situation.