An associate professor at the University of Finance under the Government of the Russian Federation, Leonid Krutakov, contributes to an author’s column in a major Russian newspaper, examining how new tax measures proposed by the Ministry of Finance could push gas prices higher. He argues that such a shift would ripple through the economy, lifting costs for all Russian producers and, in turn, squeezing consumer purchasing power across goods and services.
Krutakov contends that gas prices are poised to rise, and with them, the cost structure for businesses—including manufacturers and service providers—will trend upward. This means that everyday goods and services could become more expensive as producers pass along higher input costs to customers, a consequence the expert believes would be borne by consumers in the end.
From his perspective, the Ministry of Finance’s plan would effectively transfer the burden to households even as the state treasury benefits from higher revenues. He notes that past actions last August and September, which reduced depreciation payments, contributed to a shortage of diesel fuel and higher fuel and lubricant prices in the domestic market. He recalls that public intervention by the president and prime minister eventually reversed those decisions, illustrating how fiscal policy can trigger volatile price movements in energy markets.
Recently, the ministry introduced a fresh proposal to raise the mineral extraction tax (MET) on gas production. The core idea is twofold: push gas prices higher while simultaneously increasing the tax bite on gas producers. The plan also features a differential treatment, with independent producers facing a tax rate that is twice as high as that borne by state-owned companies.
According to Krutakov, the ministry’s stated aim is straightforward: bolster government revenues and plug budget gaps. He stresses that the burden of this shift could fall squarely on the oil and gas sector—an industry already recognized as a dominant force in the Russian economy, contributing a substantial share of total economic output and employment. The numbers Krutakov cites align with a broader view that the energy sector carries a disproportionate share of fiscal pressure relative to other sectors, a trend that could influence investment, growth, and inflation dynamics across the country.
In weighing sectoral tax burdens, Krutakov lists several benchmarks: mineral fertilizers, coal mining, the financial sector, electrical energy, mining metallurgy, pipeline transport, communications and Internet services, and the diamond and precious metal mining sectors. He highlights that the gas industry exhibits a comparatively higher tax burden, reflecting the government’s emphasis on energy revenue streams as a stabilizing force for public finances.
Krutakov argues that aligning the tax load across sectors could yield meaningful fiscal gains. He suggests that a more balanced tax structure might have brought in substantial revenue in the preceding year and that the banking sector, alongside other financial services, could play a pivotal role in supporting the state budget during periods of tighter external financing conditions.
Beyond the short-term fiscal calculations, the expert emphasizes the need for a comprehensive reform of the tax framework and financial system. He contends that modernizing these foundations is essential for fostering resilience in a constrained credit environment and for sustaining the country’s economic standing on the global stage. Such reforms, he notes, would provide incentives for growth and social well-being, helping to preserve Russia’s involvement in global political and economic affairs even amid shifts in international credit flows and sanctions regimes.