The Russian Federal Tax Service (FPS) projects a significant shortfall in federal budget revenues from oil and gas taxes for both the first half of 2026 and the full year, according to internal forecasts reviewed by WorldSignal. The estimates indicate total lost revenue from key hydrocarbon taxes could exceed 2 trillion rubles in 2026, reflecting deepening fiscal strain on the Russian economy.
The largest pressure on the revenue side comes from the extractive sector. The FPS estimates that combined shortfalls from the mineral extraction tax (MET) on hydrocarbons and the additional income tax (AIT) will reach 1.99 trillion rubles in 2026. This signals declining efficiency in Russia’s extractive industry under the combined effect of Western sanctions and reduced hydrocarbon output.
#### Oil tax revenue falls well below plan
The main factor driving the budget deterioration is the failure to meet planned targets for the oil MET. With an approved budget parameter of 7.91 trillion rubles, the annual revenue estimate for this line item stands at 6.55 trillion rubles, leaving a projected shortfall of 1.36 trillion rubles.
For the first half of 2026, actual collections from the additional income tax on hydrocarbon extraction amounted to 442.9 billion rubles against a planned 850 billion rubles — a gap of 407.1 billion rubles. On an annual basis, the shortfall for this tax is forecast at 588.7 billion rubles.
#### Gas sector shows limited offset
Revenue from the MET on gas condensate fell 81.7 billion rubles below the plan for the first half, with an annual estimate of 579.1 billion rubles versus a planned 660.8 billion rubles. A marginal positive deviation of 8.6 billion rubles in the MET on natural gas during the first half was deemed insufficient to compensate for the larger losses in the oil sector.
The FPS attributes the revenue decline to a simultaneous negative impact of price, production, and exchange rate factors. Specifically, the average oil price fell 12.1% from $57.0 to $50.0 per barrel between the fourth quarter of 2025 and the first quarter of 2026. The ruble strengthened against the U.S. dollar, and oil production volumes dropped relative to the parameters embedded in the federal budget.
#### Broader economic indicators weaken
Excise tax collections on petroleum products fell 10.3 billion rubles short of the plan in the first half. The FPS said this was due to an 8.6% decline in diesel fuel sales, from a planned 26.7 million tons to 24.4 million tons, indicating a broader slowdown in business activity and reduced demand in the freight transport market.
Excise taxes on aviation kerosene showed a sharp deterioration: instead of planned subsidies of 39.9 billion rubles, actual disbursements reached 59.1 billion rubles. The unplanned budget expenditure of 19.1 billion rubles underscores the dependence of Russia’s civil aviation sector on state subsidies.
Excise taxes on natural gas in the first half fell 12.8 billion rubles short of the plan. Alongside currency fluctuations, the FPS cited a decline in physical gas transportation volumes due to the loss of foreign sales markets.
#### Non-energy taxes cannot fill the gap
Attempts by the Kremlin to offset the shortfall in oil and gas revenues through other sectors have not yielded the desired result. While an increase in the VAT rate and a temporary rise in the corporate profit tax brought additional funds in the first half, they failed to compensate for the massive drop in hydrocarbon revenues. A temporary surplus of 280.7 billion rubles in profit tax is considered transient by the FPS; the annual forecast projects a deficit of 134 billion rubles against budget parameters.
Personal income tax collections exceeded the plan by 21.8 billion rubles in the first half, but the FPS attributes this solely to forced wage increases driven by high inflation and labor shortages — reflecting labor market imbalances rather than genuine economic recovery.
#### Chronic fiscal pressure
The FPS projects an annual shortfall in domestic excise taxes of 27.7 billion rubles relative to the plan, with negative dynamics expected not only in the energy sector but also in excise taxes on automobiles and alcohol. Falling revenues in these categories indicate declining purchasing power among both households and businesses.
The projections highlight ongoing fiscal pressure on the Russian budget.
