3 July 2026
For the third month in a row, the Russian government has been paying record subsidies to oil companies, whose refineries have been burning one after another, targeted by Ukrainian Armed Forces drones.
In June, the federal treasury transferred 312.5 billion rubles to oil companies—210.6 billion under the damper mechanism and 101.9 billion through the reverse excise tax, according to data published by the Ministry of Finance on Friday.
A month earlier, subsidies totaled 357.3 billion rubles, and in April, 359.3 billion. Cumulatively, over the three months, oil companies received 1.029 trillion rubles—an amount equal to two annual budgets of large regions such as the Sverdlovsk Region and the Krasnoyarsk Krai.
Payments under the damper—a mechanism introduced in 2018 designed to stabilize domestic gasoline prices—were the highest since December 2023. Raiffeisenbank analysts wrote that the cause is difficulties in oil refining.
As a result, the budget is losing oil and gas revenues due to soaring oil prices. In June, it collected 968 billion rubles in mineral extraction taxes—59% more than the previous year. However, every third ruble was returned to oil producers in the form of subsidies.
Total oil and gas tax revenues in June amounted to 683.6 billion rubles, exceeding last year’s figures by 38%. However, the accumulated inflow of raw material rents to the budget over the first six months fell by 23%, to 3.66 trillion rubles—the lowest since 2020.
In the 2026 budget law, the Ministry of Finance projected 8.92 trillion rubles in oil and gas revenues—440 billion rubles more than it collected the previous year. In reality, the budget was only able to fulfill 41% of the oil and gas tax plan over the first six months, and by the end of the year, according to the Accounts Chamber’s forecast, the shortfall will amount to approximately 1 trillion rubles.
By the end of summer, pressure on the budget will increase due to falling Russian oil prices, notes Vladimir Chernov, an analyst at Freedom Finance Global. Following the end of the war in Iran, the price of Urals crude oil fell below $45 per barrel by the end of June, down from $100 and above in April.
Paradoxically, the fuel crisis in Russia is also putting pressure on the price of Urals: due to problems at refineries, Russia has begun exporting more crude oil while simultaneously purchasing gasoline abroad, including from India, which has strengthened the bargaining power of Indian buyers, notes Chernov. As a result, discounts on Urals at Indian ports nearly doubled at the end of June , from $4 to $7 per barrel.
“For Russia, a sharp drop in oil prices means a reduction in export foreign exchange earnings, pressure on oil companies, and lower oil and gas revenues for the budget,” warns Chernov. “The effect will not be immediately apparent in statistics, because taxes are calculated with a time lag.
Following the federal budget, the budgets of the oil companies themselves will suffer. Damage to refinery infrastructure, which is currently leading to losses in oil refining, will ultimately result in repair costs costing at least several hundred billion rubles, notes economist Kirill Rodionov. Repairs to the Moscow Oil Refinery alone, which was hit twice and halted operations until 2027, will cost approximately $1 billion, according to analysts at Sinara investment bank.
The lack of fuel is also having an impact on the mafia economy. How much would that be in revenue losses?
Astronomical!!!!