(Bloomberg) -- The Russian government’s revenue from the oil industry fell by 29% in October from a year earlier due to lower crude prices and higher state payouts to the nation’s fuel producers.
Oil-related taxes, a key source of financing for Russia’s war against Ukraine, shrank to 1.05 trillion rubles ($10.7 billion) last month compared with 1.48 trillion rubles a year ago, according to Bloomberg calculations based on Finance Ministry data published on Tuesday.
Total oil and gas proceeds, 86% of which came from oil-production levies and the so-called profit-based tax, fell by more than a quarter to 1.21 trillion rubles.
The drop in revenue follows a decline in crude prices amid faltering demand in top consumer China and growing supplies in the US, Brazil, Canada and Guyana. Russia’s Finance Ministry calculated October taxes based on the price of Urals crude, the nation’s key export blend, of $63.57 a barrel, down from $83.18 a year ago.
October revenue was more than 75% higher than September, Bloomberg calculations show. That’s because one of Russia’s key oil taxes — a profit-based levy — is paid four times a year in March, April, July and October.
The Russian budget’s oil proceeds were dented in October by state subsidies to refiners that partially compensate them for the difference in car fuel prices in Russia and abroad. The government paid out 106.6 billion rubles to the nation’s fuel producers for domestic supplies of diesel and gasoline, according to the Finance Ministry. That compares with no payments a year ago, when fuel prices at the domestic exchange exceeded the threshold set in the payout formula, allowing the government to keep more funds for the budget.
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