New amendments under consideration in the State Duma seek to balance budgetary expenditures by ensuring oil refiners receive compensation for their supplies directed to the domestic market. The government is examining steps to revert to full compensation for the damper mechanism after a partial reduction in September, with an objective to restore complete payments by the end of October. This path reflects a deliberate attempt to stabilize domestic fuel supply and pricing dynamics amid a volatile energy landscape, while keeping a careful eye on the fiscal implications for the state budget (Kommersant).
The broader financing strategy places the substantial portion of damper-related costs on Gazprom through adjustments to the mineral extraction tax on gas and gas condensate. This alignment echoes the way Gazprom handles condensates at processing facilities that also benefit from damper support. Such a design aims to distribute the burden in a way that preserves the integrity of the processing chain while maintaining affordability for domestic markets, all within the framework of the current tax system and energy policy priorities (Kommersant).
The amendments introduce a new Kkg coefficient to the gas condensate mining tax applicable to Gazprom. This coefficient mirrors surcharges used in the oil sector’s tax formula and is crafted to capture contributions linked to gasoline and diesel fuel products. It is intended to reflect the role of condensates in fueling the domestic market, ensuring that the tax structure better aligns with the end-use outcomes that matter for consumers and industry alike. Key condensate processors within Gazprom’s network, including the Astrakhan Gas Processing Plant, the Surgut Plant, and Gazprom Neft Salavat, play central roles in transforming condensate into fuels. These facilities currently benefit from damper support, yet a condensate-specific surcharge has not been present in the current tax regime. In 2022, Russia produced about 18.3 million tons of gas condensate, underscoring the potential fiscal impact should tax policy shift further toward condensate processing and its downstream uses (Kommersant).
Analysts suggest that the new coefficient would not apply to projects where the gas share falls below 35 percent of total production, a threshold that likely excludes Gazprom Neft from this particular change. Government officials indicate that the amendments have received initial approval in a White House meeting and are slated for submission to the State Duma for debate and passage (Kommersant).
A second reform piece from the Finance Ministry ties the level of reverse consumption tax subsidies to domestic market obligations. In practical terms, a company would receive the full subsidy only if at least 40 percent of its light oil product production is directed to the Russian market as gasoline and diesel fuel, reinforcing the link between production choices and domestic energy security goals (Kommersant).
President Vladimir Putin has instructed the government to coordinate with oil companies to stabilize fuel prices for gasoline and diesel, a measure described as essential amid fluctuating global energy markets. The move follows earlier signals that price controls would be activated when oil prices approach the $50 per barrel range, a benchmark that influences domestic pricing decisions and the affordability of fuels for consumers across the country (Kommersant).