Russian economy latest: Oil, gas September revenues down 25% from last year amid high budget deficit
Russia's federal budget received 582.5 billion rubles ($7.1 billion) in oil and gas taxes in September, 25% less than the same month last year, the Finance Ministry reported on Oct. 3.
The decline comes as Russia struggles with a growing budget deficit, which reached 4.19 trillion rubles ($49.4 billion) by the end of August, already surpassing the government's annual target.
The deficit has forced Moscow to reduce planned military spending for 2026.
Since January, total oil and gas revenues have dropped by 1.7 trillion rubles ($20.7 billion) to 6.6 trillion rubles ($80.4 billion). The decline has steadily sped up, reaching 21% in the first nine months of 2025.
Revenues from the mineral extraction tax on oil fell 32% in September compared to last year, while gas tax revenues plunged 52%. Export duty revenues also fell 27%.
Lower global oil prices, sanctions, and a stronger ruble have further reduced Moscow's export earnings.
Russia's Finance Ministry proposed raising the value-added tax (VAT) from 20% to 22% on Sept. 24, as part of a draft budget aimed at offsetting the mounting costs of the ongoing war in Ukraine.
Russia had planned to spend 13.5 trillion rubles ($164.5 billion) on defense in 2025, about 32% of all expenditures. In 2026, that figure will fall by 0.6 trillion rubles ($7.3 billion), a cut of about 4.4%.
Sberbank CEO German Gref, head of Russia's largest bank, said on Sept. 5 that Russia's GDP growth had slowed to near zero in July and August after a sharp drop in the April–June quarter.
"The second quarter can practically be considered technical stagnation," he said.
Economists note that Russia's economic troubles reflect deeper structural issues.
"All these discussions about stagnation and inflation are actually about finding ways to cover the budget deficit," economist Oleh Pendzin told the Kyiv Independent in September.
"But Russia is cut off from international financial markets, so the only source to cover the deficit is the domestic economy."
Tim Zadorozhnyy
