Russia to raise threshold for deviations from price indicator in damper to 20% for gasoline, 30% for diesel in two stages

MOSCOW. May 21 (Interfax) - The threshold for deviations from price indicators in the formula for Russia's fuel damper subsidy will be raised in two stages, Deputy Finance Minister Alexei Sazanov told reporters.

"I think that it will be two-stage. First it will be 15% for gasoline and 25% for diesel fuel for a while, then 20% for gasoline and 30% for diesel fuel. We need to determine the time interval for which the transitional first stage will be in effect. We're discussing this now," Sazanov said.

It was reported earlier that the government is studying a proposal to raise the threshold for deviations from indicative prices in the damper formula where the subsidy is reduced to zero for oil companies. The threshold is now 10% for gasoline and 20% for diesel.

At the end of last year, the deputy chairman of the State Duma's energy Committee, Yury Stankevich submitted a budget amendment to parliament to raise the thresholds to 15% for gasoline and 25% for diesel. Later a proposal was submitted to the government to raise them to 20% and 30%, respectively.

Under the current Tax Code, if wholesale gasoline and diesel prices in Russia increase too much and deviate from the indicative prices (60,450 rubles per tonne for gasoline and 57,200 rubles per tonne for diesel in 2025) by more than 10% and 20%, respectively, on average for a month, a damper subsidy is not paid for that month.

So far this has only actually happened once since the fuel damper was introduced, at the height of the price crisis in 2023, when oil companies did not receive the damper from the government for September because that month average exchange prices for both gasoline and diesel were far higher than the cut-off after which the subsidy drops to zero.

After this precedent, oil companies repeatedly asked to separate the calculation of the damper for gasoline and for diesel by setting thresholds separately by type of fuel, as well as to expand the deviations from indicative prices for each fuel. The thresholds were separated by type of fuel last year.

Oil companies received 1.82 trillion rubles from the government through the damper mechanism in 2024, 1.59 trillion rubles in 2023, 2.17 trillion rubles in 2022 and 674.5 billion rubles in 2021. In 2020, oil companies paid the government 356.6 billion rubles under the fuel damper due to the market situation, and in 2019 the government paid companies 282.2 billion rubles.