Russia's Oil and Gas Revenues Fall 25% in September Amid Growing Budget Deficit

Russia's oil and gas revenues to the federal budget fell sharply by approximately 20-25% year-on-year in September 2025, totaling around 582.5 billion rubles ($7.1 billion), reflecting a significant decline amid falling global oil prices, sanctions, and a stronger ruble. This decline has contributed to a growing budget deficit, which reached 4.19 trillion rubles ($49.4 billion) by the end of August, surpassing government targets and forcing cuts in planned military spending for 2026 by about 4.4%. Revenues from mineral extraction taxes, gas taxes, and export duties all saw steep declines, with gas tax revenues falling by as much as 52% in September compared to the previous year. The Russian Ministry of Finance has responded by proposing an increase in the value-added tax (VAT) from 20% to 22% to help offset the financial strain caused by the ongoing war in Ukraine and reduced export earnings. Despite initial budget forecasts expecting over 10 trillion rubles from energy revenues in 2025, the estimates have been revised downward to around 8.3 trillion rubles due to these economic pressures. Experts note that Russia's GDP growth has slowed significantly, indicating economic stagnation amid these fiscal challenges.