Russian energy revenue rebounds by 22.5% in February

Russian oil and gas revenues, the mainstay of state coffers, rose 22.5% in February, but were still down 46.4% from February 2022, Finance Ministry data showed on Friday.

Tax and customs revenue from oil and gas sales had fallen in January to its lowest level since August 2020.

Moscow relies on energy revenue – last year around 11.6 trillion rubles ($154 billion) – to fund government spending, and has been forced to sell foreign reserves to cover a deficit stretched by the cost of its military operation in Ukraine.

Budget income from oil and gas sales reached 521.2 billion rubles ($6.9 billion) last month, compared to 425.5 billion in January and 971.7 billion rubles in February 2022.

The ministry on Wednesday gave a notional price of $49.56 a barrel for Russian Urals crude oil in February – marginally up from January’s $49.48, but well down on the February 2022 price of $77.16.

February’s revenues were boosted by a rise in proceeds from the mineral extraction tax (MET) on oil, which grew by 126.6 billion rubles ($1.68 billion) from January, as well as the MET on natural gas, which increased by 76.2 billion rubles.

Russia’s budget for 2023 foresees a deficit of 2% of GDP, and any larger shortfall would require a mix of higher foreign currency sales, lower spending, more borrowing or tax rises.