The government is preparing seizures from commodity exporters to finance the war

Following Gazprom, which was ordered by the Russian authorities to pay 1.2 trillion rubles in additional taxes, other exporters of raw materials were the turn to “throw in” for the war.

The government is preparing to withdraw funds from coal and fertilizer producers, Bloomberg reports, citing an instruction from Prime Minister Mikhail Mishustin and sources familiar with the matter.

Large companies, according to officials, will have to pay increased dividends, as well as make a one-time payment to the budget. Their size has not yet been determined and will depend on how 2022 ends for the treasury.

The authorities will seek to force companies to pay dividends above 50% of net income wherever possible, Bloomberg sources say.

The extra money, they say, is needed to pay for the costs of the war.

In the 2023 budget, the Ministry of Finance has set a record 5 trillion rubles under the heading “national defense” – 1.5 trillion more than the amount that was approved in the three-year budget adopted a year ago.

The authorities intend to spend another 4.4 trillion rubles under the article “national security and law enforcement”, which covers the budgets of the Ministry of Internal Affairs, the Russian Guard, special services, the Investigative Committee, the prosecutor’s office and the FSIN system.

In total, the power structures will “eat up” every third ruble of budget expenditures. Its deficit, according to the projects of the Ministry of Finance, will amount to 2% of GDP, or 2.9 trillion rubles. With revenues of 26.1 trillion rubles, the government intends to spend 29 trillion rubles.

In reality, the budget deficit can be much larger. Due to the EU embargo and the ceiling on Russian oil prices, the price of Urals, the main export brand of Russian oil companies, fell by 35% in two months and amounted to $50.5 per barrel in December, although it stayed above $75 in the fall.

At such prices, the budget will lose about 2 trillion rubles, and its deficit will inflate to 5 trillion, estimates Evgeny Suvorov, an economist at Centrocredit Bank.

“The real catastrophe,” he believes, will be prices of about $40 per barrel: in this case, the Ministry of Finance will have to send expenses “under the knife”.

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