Oil cos receive 107.2 bln rubles from budget in April after damper adjustment vs 96.7 bln rubles in March

MOSCOW. May 4 (Interfax) - Payments from the Russian budget to oil companies for the fuel damper totaled 107.2 billion rubles in April 2023 against 450.3 billion rubles in April 2022, according to the materials on forming and utilizing the federal budget's additional oil and gas revenues, as posted on the Finance Ministry's website.

Consequently, payments to oil companies from the budget were even higher than the previous month with the damper adjusted since the beginning of April 2023. Similar payments to oil companies totaled 96.7 billion rubles in March 2023 versus 152.8 billion rubles for the same period in 2022.

Damper payments were 360.5 billion rubles in January-April 2023, down from 801.9 billion rubles in the same period of last year.

The price differential used to calculate the gasoline damper rose from $20 to $25 per barrel on April 1, when a price differential was also introduced for calculating the diesel fuel damper, setting a limit of $10 per barrel.

The Petromarket research group had estimated that in April of this year, motor fuel producers received about 100 billion rubles as damper payments for supplies of gasoline and diesel fuel to the domestic market. The adjustments to the formulas for calculating damper, which came into effect on April 1, saved the federal budget approximately 26.5 billion rubles. But the reduction in damper payments has not had a critical impact on the profitability of refineries: at the moment, the net refining margin is an estimated 11,000-12,000 rubles per tonne, which is only 1,000 rubles per tonne less than it would have been under the old damper formulas, Petromarket said.

The fact that the April damper adjustment did not result in big savings for the budget has prompted a discussion about a more radical change to the mechanism.

Finance Minister Anton Siluanov said at the end of April that the fuel damper in Russia was only bolstering refining margins at present; to remedy this, the Finance Ministry is proposing the damper be halved between July 2023 and July 2024. As a result of such an adjustment, payments to oil producers from the budget on the damper will decrease by 30 billion rubles a month. At the same time, it will be important for the Federal Antimonopoly Service to make sure that oil producers do not try to raise prices for petroleum products after the change to the damper.

Fuel damper payouts rose to 2.16 trillion rubles in 2022 from 674.5 billion rubles paid in 2021. Oil companies paid 356.6 billion rubles to the budget in 2020, due to market conditions. The budget paid 282.2 billion rubles to oil companies in 2019.

The fuel damper has been in effect in Russia since 2019 and is the difference between the export price of fuel and the indicative domestic price, specified by law. The state pays oil companies if this difference is positive, and exports become more profitable than deliveries to the domestic market, while oil companies pay the state if the difference is negative. However, the sanctions against Russia resulted in the export value of Russian petroleum products being miscalculated and Russian Urals oil starting to trade at a discount. The Finance Ministry is looking for an optimal fuel damper formula to increase savings for the budget while not drastically worsening the finances of oil refineries or the fuel market in general.