Anton Gerashchenko
@Gerashchenko_en
The fuel crisis in Russia has long ceased to be a problem solely for drivers and farmers. It is gradually becoming a problem for the state budget. Russian authorities had projected that the deficit for all of 2026 would amount to 3.786 trillion rubles ($48,9 billion) (1.6% of GDP). However, in the first half of the year alone, it reached 5.731 trillion rubles (~ $74 billion) (2.5% of GDP). Even a small surplus in June did not reverse the trend: in six months, the budget hole had already exceeded the full-year target by about 1.5 times. Ukrainian strikes on Russian oil refineries played a significant role in this.
🔷 First, Russia has less oil money. The Russian budget relies heavily on oil and gas revenues. But for oil to translate into tax revenue, it must be processed and sold. Today, Russia is facing increasing problems in this regard. In the first five months of 2026 alone, oil and gas revenues for the federal budget were nearly 30% lower than during the same period the previous year.
🔷 Second, the so-called "damper." It's more profitable for oil companies to sell fuel abroad than domestically. To prevent gasoline from disappearing from Russian gas stations and prices from rising to unacceptable levels, the government pays oil companies compensation for sales on the domestic market. This results in a strange arrangement: the government takes money from oil companies through taxes, and then immediately returns a significant portion of it.
In 2025, these compensation payments accounted for about 10% of all oil and gas revenues in the budget. By the spring of 2026, this share had risen to nearly 30%: in April–June alone, the damper payments totaled about 622 billion rubles ($8 billion) against 2.2 trillion rubles ($28,4 billion) in oil and gas revenues. In other words, an ever-increasing portion of oil money is no longer remaining in the budget.
🔷 Third, new expenses. After the attacks on the refineries, the government had to restrict fuel exports (which means lost revenue), grant tax breaks to refiners, fund additional protection for refineries against drones, and support the domestic market. The budget is simultaneously receiving less revenue and spending more - the worst possible combination.
The Russian government is desperately looking for money. As of January 1, 2026, Russia raised the excise tax on gasoline from 17,088 to 17,959 rubles ($232) per metric ton of Euro-5 gasoline. According to government estimates, the excise tax increase will bring the budget only about 10.5 billion rubles ($135,5 million) in additional revenue in 2026-2027. By comparison, the federal budget deficit exceeded 5.7 trillion rubles in the first half of 2026 alone.
That is why discussions in the State Duma about further excise tax hikes or higher gasoline prices are more a demonstration of activity than a genuine solution. That leaves four remaining sources:
◾️ Taxes on everyone - the primary source.
VAT - the tax built into the price of nearly every item in stores - has been increased from 20% to 22%, the number of taxpayers has been expanded, and excise duties on alcohol, tobacco, and sugary drinks have also been raised. The increase in indirect taxes alone is expected to generate more than 1.2 trillion rubles ($15,5 billion) in additional revenue, while higher excise taxes on "harmful products" are projected to bring in another 138 billion rubles ($1,78 billion) during 2026-2027. Simply put, ordinary Russians will increasingly foot the bill for the deficit every time they make a purchase.
◾️ Debts.
The government is borrowing money domestically at a record pace by issuing federal bonds, which are purchased primarily by banks. The placement plan for 2026 totals up to 6.47 trillion rubles ($83,5 billion), including 1.5 trillion ($19,3 billion) during the third quarter alone. The catch is that about 1.34 trillion rubles ($17,3 billion) of the new borrowings will go toward repaying old debts. This means that the government is increasingly relying on refinancing its own debt.
◾️ Savings.
Russia has a reserve "piggy bank" - the National Welfare Fund. The government had promised to leave it largely untouched in 2026, but as early as February, it had to sell 13.2 billion yuan and 7.9 tons of gold, raising 244 billion rubles ($3,15 billion) to finance the deficit. The fund's liquid portion has shrunk to 3.62 trillion rubles ($46,7 billion) - less than the current accumulated federal budget deficit.
◾️ Property of another.
The state is squeezing more dividends out of state-owned companies and is increasingly confiscating business assets through the courts. In 2025 alone, Rosimushchestvo generated a record 638 billion rubles ($8,24 billion) in revenue for the budget from state property, dividends, and privatization transactions.
So, the fuel crisis has come full circle: less fuel means less oil revenue → more compensation and expenses → a deeper budget deficit → new taxes, debts, the use of reserves, and the mobilization of state assets.
And since it is this very budget that finances Russia's war against Ukraine, every ruble the Kremlin is forced to divert to plug budget holes is a ruble that can no longer be spent on waging war.
4:21 PM · Jul 14, 2026 · 73.6K Views
https://x.com/Gerashchenko_en/status/2077141360961065407
