The Ministry of Energy of the Russian Federation has promised a new response to the "price ceiling" for oil introduced by Western countries. The department intends to finalize the decree of President Vladimir Putin so that Russia can more rigorously resist price restrictions. This is stated in the message of the department.
The presidential decree prohibits Russian companies from selling oil to any counterparties that directly or indirectly comply with the restrictions set by the Western coalition. True, the document mainly talked about the fact that such restrictions should be reflected in contracts that are concluded with foreign companies. The Ministry of Energy claims that the adopted document needs to be clarified, which the department will do in the near future.
“Detailed information on the application procedure will be published in the near future, as well as details regarding the procedure for monitoring prices and discounts. The results of the monitoring will be used to prepare, if necessary, additional measures aimed at limiting the possible discount to limits based on market prices,” the Ministry of Energy said in a statement.
In its report, the agency refers to a report by Bloomberg, which notes that the selling price for Russian oil in January dropped to $37.8 per barrel. This is almost two times lower than the current quotations for North Sea Brent, which is traded around $78. For the Russian authorities, this level of oil prices is close to catastrophic, since the budget for 2023 was drafted with a projected average oil price of around $70 per barrel. Such a low price for one of the country's main export products may force the authorities to make tougher budget decisions: increase public debt or sequester the budget.
One of the measures that the authorities are considering , given the fall in oil prices, is another consolidation of income, expressed in a one-time withdrawal of income from large businesses, namely companies in the coal and chemical industries. At the same time, at the end of 2022, the authorities took a number of similar measures that increase the tax burden for the oil and gas, chemical and coal industries.
