Oil and gas in March brought the budget only 29% of income

On oil and gas revenues in March 2016 accounted for only 28.5% of all revenues of the Federal budget, published today, follows from statistics of the Ministry of Finance. In the first quarter, the share of oil and gas revenues in total budget revenue declined to 34% — the lowest level since mid-2009 (if you look at monthly data of the Ministry of Finance and Treasury).

Oil and gas revenues, which result from the severance tax on raw materials and export duties on crude oil, natural gas and oil products, in March continued to decline, reaching 304,5 billion rubles (compared to 317 billion rubles in February and 371 billion rubles in January). The average price of Russian oil Urals in the first quarter amounted to only $32 per barrel (previous year during the same period it was $52,8).

When the observed dynamics of income and to reduce duties on mineral extraction tax and export duties account for the overwhelming majority of the decline in revenues for the first quarter to achieve the target of budget deficit of 3% of GDP sequestration of budget expenditures should amount to 10-11%, according to analysts, credit rating agencies ACRA. Although the government is now discussing the transfer budget edits from may to October 2016, “the budget system currently works like in fact, the budget cutting has already taken place”, they write in comments to the operational budget.

The share of oil and gas revenues fell in March to a minimum not only because of low oil prices, but because 1.8 times by February increased oil and gas revenues. Their growth in March compared with February — the traditional event, said Alexandra Suslina of the Economic expert group. “Usually February is a local decline in non-oil revenue, which is then compensated in March. Partly this is due to the payment and reimbursement of VAT; in addition, there is an annual surcharge on the income tax,” she explains. According to the Ministry of Finance, in March the revenues from domestic VAT amounted to more than 337 billion roubles (in February — only a 93.6 billion), and fees tax on profits increased from 18.7 billion to 64.3 billion.

This week on the need to get away from dependence on natural resources has reminded the Minister of Finance Anton Siluanov. Brent crude has risen from the January low at 50% (now trading at $44,3 per barrel), respectively, and strengthened the ruble, but “this increase of price, raw materials — we don’t need,” said Siluanov at the Exchange forum on April 12. “The increase in oil prices by $10 per barrel gives 0.8–0.9 percent economic growth. But do we need such growth, which is not as high quality? The quality is poor in this growth”, — stated the Minister.

In the current Federal budget includes the average price of Urals oil at $50, but in the new macroeconomic forecast the Ministry of economic development, which was submitted to the government, the baseline scenario are calculated based on $40 per barrel in 2016. Now the forecast is sent back for revision. “The final version of the forecast will be ready next week and considered at a meeting of the government”, — said the representative of the Ministry of economic development.