Price of Russian oil used for tax calculations jumps 60% above the budget level

Russian Oil Price Used for Tax Jumps 60% Above Budgeted Level in October

Russian Oil Price Surge and Its Impact on Government Finances

Current Oil Price Trends

Oct 21 (Reuters) - The rouble-denominated price of Russian oil used for tax calculations has averaged about 60% above the level assumed in the federal budget so far this month, providing a boost for government finances, Reuters calculations showed on Wednesday.

War in the Middle East and related supply disruption have kept global oil prices above $100 per barrel.

Recent Tax Calculation Data

Reuters calculations showed the tax price of Russian oil averaged 8,699 roubles ($103.4) per barrel in the first three weeks of October, about 11% higher than in September.

If oil prices and the rouble exchange hold steady until the end of the month, the rouble-denominated price of Russian oil used for tax calculations will average 8,387 roubles ($100,2) per barrel, which will be the highest level since March 2022, Reuters calculations showed. 

Government Budget Assumptions

For budget revenue calculations, the government assumed a Russian oil price of $59 per barrel and an exchange rate of 92.2 roubles to the dollar, equivalent to 5,440 roubles per barrel.

Budget Deficit and Fiscal Policy

Russia expects a budget deficit equal to 3% of gross domestic product in 2026, almost double its original target and higher than last year.

The government raised taxes this year to help fund spending on the war in Ukraine and had aimed to reduce the budget deficit to 1.6% of GDP from 2.6% in 2025. However, the deficit for January to August had already reached 2.5% of GDP.

(Editing by Barbara Lewis)