Govt discussing changes to oil damper parameters, should be clear soon

MOSCOW. April 26 (Interfax) - The Russian government is discussing changing the parameters of the damper for gasoline and diesel fuel, and the details will be known soon, Deputy Prime Minister Alexander Novak told reporters on the sidelines of the Board of Trustees of the Moscow Energy Institute (MPEI).

"Yes," Novak said, when asked if damper modifications are being discussed.

Earlier on Tuesday, Bloomberg, citing two sources familiar with the discussions, said that the Russian government is considering increasing the base price of gasoline and diesel fuel in calculation of the fuel damper mechanism, which could lead to a reduction in payments to oil companies from the budget or reduce what the companies themselves are paying into the budget.

"I think in the near future you will find out what will be submitted to the State Duma," the Deputy Prime Minister said. "I think the government has already considered it," Novak added.

He did not comment on what parameters may change, noting that this is the prerogative of the Finance Ministry.

The press service of the department, commenting on the information from Bloomberg, said on Tuesday, "There was no such proposal and it was not discussed in general."

In mid-April, Finance Minister Anton Siluanov said: "We have a number of thoughts regarding the adjustment of the mechanism for the taxation of oil companies. We are discussing this in the government and, accordingly, with oil companies."

The damper mechanism for petroleum products has been operating in Russia since 2019. It is calculated from the difference between the export value of the fuel and the indicative domestic price (specified by law). If this difference is positive, and exports become more profitable than deliveries to the domestic market, then the state pays the oil companies, if the difference is negative, oil companies pay to the budget.

Payments from the Russian budget to oil companies for the fuel damper in March 2023 totaled 96.7 billion rubles, while in March 2022 they were 152.8 billion rubles.

In Q1 2023, these payments totaled 253.3 billion rubles compared to 351.6 billion rubles in the corresponding period of the previous year.

Starting April 1, the adjusted damper for gasoline and diesel fuel came into force; the price differential used to calculate the damper for gasoline was increased from $20 to $25 per barrel, and a price differential was introduced when calculating the damper for diesel fuel with a limit of $10 per barrel.