Russia's economy in crisis: Gazprom's tax relief hits hard!

Russia's economy in crisis: Gazprom's tax relief hits hard!

A dark storm is gathering over Russia: Vladimir Putin's dream of a thriving energy power is crumbling! The alarming news from Moscow is bringing the Russian economy to the brink of collapse. The state budget is facing a catastrophic collapse, and all because of the draconian tax breaks for Gazprom, the country's most powerful gas giant!

Hope for high income? None! Putin's ambitious expectations are bursting like an overheated gas kettle! A shocking decline in oil and gas revenues is underway. According to the latest draft budget published by the Reuters news agency, revenues are expected to be 11.3 trillion rubles in 2024 - but by 2025 they are expected to fall to a dramatic 10.9 trillion rubles! That's almost a third less in just two years!

Gazprom is fighting for survival: tax relief hits back!

The cause of this fiasco? A steep tax relief for Gazprom, which is now slowing down the energy monopolist! The mineral extraction tax will be reduced by over 30 percent by 2025 - this corresponds to a financial relief of a whopping 550 billion rubles! But appearances are deceptive: this support could prove to be a boomerang that brings Gazprom to its knees. Exports in Europe have collapsed dramatically due to the Ukraine war and the draconian sanctions!

The numbers speak volumes: Gazprom reports a catastrophic loss in the first quarter of 2023. Where more than 174 billion cubic meters of natural gas were delivered to Europe in 2021, in 2023 there will only be a shocking 28.3 billion cubic meters! This brings the net loss to a frightening 6.4 billion euros.

The desperate race for alternatives

But what is Gazprom doing to escape this crisis? The answer: eyes on the Asian markets, especially China! An ambitious project that threatens to come to nothing! The construction of the “Power of Siberia 2” pipeline is stalled. Inadequate infrastructure as an obstacle: The existing pipelines cannot transport the necessary quantities! What now? Russia urgently needs new pipelines in order not to completely slide into the gas business!

The negotiations with China over the gas price are dragging on and there is no success. Gazprom is thus caught in a spiral of shortages, while its own war chest threatens to dwindle. Pessimism in Russia's economy is at its peak - where does this path lead? Into devastation or into recovery? Time will tell!

The alarming developments make it clear: Russia's economy is on the brink! A scenario that could unsettle even the strongest leader. The question that now arises: How long can Putina remain in control of this explosive situation?