Russian Gas Price Increase: Implications for Russian Economy
Russia is a key player in the global energy arena, with its huge natural gas reserves. Recent developments in Russia’s energy sector, especially in the area of Russian gas, have caused some concern. To secure additional budget revenue, the Russian Government is considering increasing gas prices for industrial consumers in the country as well as the Mineral Extract Tax (MET). This move has significant implications not only for Russia’s fiscal health but also for the global energy market.
Russian Gas Price Hike Strategy
The Russian government has made a strategic move in terms of finance by deciding to raise gas prices for industrial consumers at home and then increase the MET. This initiative could inject up to $1,4 billion (130 billion roubles) into the budget. The additional budget revenue will be used to boost the Russian economy as well as reduce budget deficits.
It is not known what specific changes are being made to the MET calculation, but it is obvious that they will affect all gas producers.