(Bloomberg) -- Russia will raise the export levy paid by its oil producers in September to the highest level this year, boosting state coffers as the price of the nation’s crude surges.
The government plans to increase the oil export duty to $21.40 per ton next month, up by more than a quarter from August, the Finance Ministry said in a statement Tuesday. That equates to around $2.92 a barrel.
Oil taxes are a key source of revenue for Russia, which is seeing its budget strained by rising costs to fund the Kremlin’s war in Ukraine and Western sanctions on the economy. Crude prices have risen globally amid supply reductions by the OPEC+ alliance and robust demand. Russia, one of the leaders of the producer group, plans to keep its exports curbed next month.
Those factors have helped propel the price of Russian crude above the $60-a-barrel threshold set last year by the Group of Seven nations — an effort to limit the flow of petrodollars to Moscow while keeping the global oil market supplied.
The country’s flagship Urals blend averaged $70.33 a barrel in the monitoring period from July 15 to Aug. 14, with its discount to the global Brent benchmark narrowing to $13.90, according to the Finance Ministry.
The export duty is just one of several levies paid by the country’s oil industry and accounts for a fraction of total petroleum revenue as Russia completes a multi-year tax reform. Moscow is gradually shifting the tax burden to oil production, away from shipments abroad, and plans to abolish the export duty in 2024.
Still, the hike of the duty in the U.S. dollars — combined with a weaker ruble — should help offset Russia’s lower overseas sales of crude in September while boosting budget revenues. The Russian currency has been the third-worst performing among its emerging-market peers this year, falling 25% against the dollar.
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For the remainder of the year, Russia’s extra proceeds from oil and gas sales will reach about 800 billion rubles ($8.1 billion) above a baseline level in the budget amid higher prices, Maxim Oreshkin, chief economic adviser to President Vladimir Putin, wrote in a column published by state news agency Itar-Tass on Monday.
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