Russian government oil and gas revenues plummeted in January, leading to the largest budget deficit in the first month of the year since at least 1998. This is reported by Bloomberg, referring to the Ministry of Finance of the Russian Federation..

Tax revenues from oil and gas fell 46% in January compared to the same period last year, while spending due to the war in Ukraine rose by 59%. The combination of these factors led to the fact that the state budget deficit of Russia amounted to 1.76 trillion. rubles (25 billion US dollars).

The drop in oil and gas revenues is a consequence of Western sanctions on Russian exports, which now include a European Union ban on most maritime imports of oil and petroleum products, as well as an oil price ceiling set by the G7 countries. Because of these measures, Urals oil, Russia's key export blend, is trading at a significant discount..

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Vladimir Putin, whose military aggression against Ukraine has led to international sanctions, has demanded that his government develop a new estimate of the cost of Russian oil by March 1 to offset the negative impact of sanctions on the budget.. The Ministry of Finance levies taxes on oil companies based on Argus Media's monthly Urals price estimate, which includes freight and insurance costs for cargo shipped to northwestern Europe.

The Russian government is working on new approaches " This is due to the fact that “the representativeness of Urals quotes as an objective price indicator of export prices for Russian oil” has decreased.

According to the Ministry of Finance, in January, the average price of Urals was $49.48 per barrel, which is the lowest since December 2020..

The decline in Russian gas exports also contributed to lower energy revenues after OAO Gazprom cut most of its supplies to Europe, once its largest market..

Non-energy revenues also fell 28% in January, the ministry said, partly blaming the change in value-added tax rules..

“A decline in budget revenue from oil sales is expected, but a 30% drop in consumption-related domestic taxes is ominous,” said Alex Isakov, an economist at Bloomberg Economics.. “We expect oil revenues to continue to be low throughout the year, resulting in a deficit of 1.5% of GDP, which exceeds government forecasts.”.

In a separate statement, the Ministry of Finance said it sold 3.6 tons of gold in January as well as 2.3 billion yuan from the National Welfare Fund to help cover the shortfall.. The main part of Russia's international reserves was frozen by international sanctions. The ministry said it believes it can still meet its budget targets for the current year..

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Recall that in the fall, Putin said that the Russian economy would not fall by more than 2.5% in 2022, and immediately a real construction boom began in Rosstat data - all industrial production, as before, was declining, but construction was rapidly flying up, little. In parallel, however, the production of cement, concrete and other building materials, the volume of housing put into operation, the number of builders and their salaries were declining.. That's all you need to know about the level of optimism in Russian statistics. But even in these victorious data, one can already find indicators that at least deny the thesis of the Russian dictator that all the financial, budgetary and structural risks of the Russian Federation have already passed, and with dignity.. In fact, the most interesting is still ahead. Read more in the article by Yulia Samaeva "