Payments to the budget from the mineral extraction tax (MET) for oil in October and November could reach their highest levels for the year, potentially even setting a record for the past three years.
The size of the MET is influenced by three main factors: production volumes, oil prices, and the exchange rate of the ruble. In October, payments will be based on the September results, while in November, they will be based on October. Oil production in Russia in September remained nearly unchanged compared to August. According to OPEC, there was a slight decrease of 38,000 barrels per day, which does not significantly affect the overall picture. The production level for October remains unknown, but it is unlikely to change significantly. Technically, it is not possible to rapidly increase production at most Russian fields, and there are no reasons to reduce it.
The price of Russian oil Urals for tax calculations in September was $92.08 per barrel, according to the Ministry of Economic Development. In August, it was $67.11 per barrel, marking a 37% increase. There is a high probability that the price of our oil will remain at this level or even increase slightly by the end of October, as global prices for North Sea Brent oil, against which our oil is traded at a discount, have not dropped below $100 per barrel since the beginning of the month. The average exchange rate in September was 85.04 rubles per dollar, while in October (for the past period) it was 84.2 rubles per dollar.
As noted in a conversation with "RG" by the head of the National Energy Security Fund, Konstantin Simonov, payments for oil production in October (for September) will be very substantial. They are expected to be about twice the payments made in September (for August). In rubles, our oil will cost over 7830 rubles per barrel. This is the highest price in rubles since the fall of 2023, but at that time, the increase was due to the weakening of our currency.
Additionally, in October, oil companies make payments for the additional income tax (AIT) for the third quarter. While the MET is calculated based on gross oil production figures, the AIT takes into account the financial results of operations.
Simonov emphasizes that the macroeconomic conditions in September were quite favorable for our oil companies, so even considering the less than ideal situation in July and August, the final payments for AIT in the third quarter should be strong.
The expert's statements are supported by simple calculations. Given that in September (for August), companies paid 688.3 billion rubles in MET for oil to the budget, payments in October should exceed 900 billion rubles. This is in addition to quarterly payments for AIT.
According to Sergey Tereshkin, the CEO of Open Oil Market, October AIT receipts are unlikely to significantly exceed the July level, which amounted to 396.1 billion rubles. However, even taking this into account, the total figure for oil and gas revenues will still reach at least 1 trillion rubles, marking the highest monthly level since the beginning of the year.
In rubles, Russian oil has not been as expensive as it is now since the fall of 2023.The oil and gas revenues for the treasury in November (for October) are likely to be lower since there will be no payments for AIT. However, there is a possibility of a slight increase in MET for oil if barrel prices remain above $100 by the end of the month.
Nevertheless, the actual oil and gas revenues of the budget in October and November (after subsidies to oil companies) seem likely to continue lagging behind last year’s figures. This is because oil companies receive reverse payments from the budget for investments in plant modernization (investment supplement), for oil sent for processing domestically (reverse excise), and for price stabilization (dampening). These payments are currently increasing, with dampening payments being the largest. This is compensation for oil companies for supplying fuel to the domestic market at prices below export levels (export alternative). In September (for August), dampening payments amounted to 305.5 billion rubles, with a total of 418.5 billion rubles allocated for all reverse payments.
According to Sergey Frolov, managing partner at NEFT Research, with an expected 950 billion rubles in MET for October, dampening will cut about one-third of gross collections. Net revenues to the treasury remain positive, but a significant portion of the "raw surplus" is redirected back to refineries as a cushion to stabilize prices at gas stations (GS).
Payments for dampening are rising faster than oil revenues. As explained by Daniil Tyun, CEO of "DA-Consulting," MET depends on the price of our oil, while dampening is calculated based on the difference between the export alternative for gasoline and diesel with established (indicative) prices in the domestic market. Currently, due to the crisis in the Middle East, there is a shortage of petroleum products. High gasoline and especially diesel prices increase the export alternative faster than oil prices themselves rise.
It is important to clarify that the dampening mechanism is funded by the oil companies themselves. To ensure the mechanism’s functionality, MET for oil was increased in 2019. All oil-producing companies pay this tax, while the largest oil refineries (OR) receive the payments. Therefore, referring to dampening as subsidies is not entirely correct.
This year, the size of the dampening also depends on fuel imports. Since July, suppliers of imported gasoline (from July) and diesel fuel (from August) have received dampening. Prior to this, only Belarusian refineries were eligible for payments. Imported fuel currently accounts for about 10% of total consumption in the country, with the majority of supplies coming from Belarus.
Tereshkin estimates that dampening payments in October (for September) could exceed 350 billion rubles, while total subsidies for OR, including reverse excise and investment supplements, could reach 470-480 billion rubles. This is due to record levels of export alternatives: in September 2026, the export alternative price for AI-92 gasoline reached 126,764 rubles per ton compared to 104,902 rubles per ton the previous month, and for diesel, it rose from 123,187 rubles to 147,268 rubles per ton.
The expert expects that in November and December, the total volume of oil and gas revenues will be around 600 billion rubles per month (the consequences of reduced MET receipts will be partially offset by lower payments to oil companies).
Tyun allows that dampening payments in October and November will be in the range of 250-350 billion rubles per month. Comparing this to the July figure of approximately 113 billion rubles per month, the additional burden will be around 274-474 billion rubles. This does not mean that the entire sum is a pure loss; part of the payments would occur even with lower prices.
Real oil and gas revenues of the treasury, due to the high level of raw material tax, will remain positive, emphasizes Frolov. However, almost every third ruble collected by the state from oil extraction "at the well" is automatically redirected back to OR as compensation.
Source: RG.RU
