The 2025-2027 federal budget submitted by the government to the Russian State Duma confirmed previous reports that state-controlled natural gas giant Gazprom will be supported.

According to the text of the explanatory note accompanying the budget, the decrease in oil and gas revenues in 2025 is mainly due to the planned change in legislation regarding the MET (Mineral Extraction Tax) on gas, Renaissance Capital wrote on October 1.

One of the annexes contains an estimate of the impact of these changes – RUB550bn in 2025 and RUB50bn in 2026.

“If these changes are approved, Gazprom will receive a large one-off support from the budget and will be able to improve its financial performance, including in terms of debt load, which is important for potential dividend payments. At the same time, the effect of this measure is temporary,” Renaissance Capital commented.

In regards to the domestic gas market, the analysts also note the increase in gas price indexation from 8.2% to 10.3% for all categories of consumers, as well as a 21.3% tariff increase for electricity and housing and utilities companies from 1 July 2025 in the updated three-year socio-economic development forecast submitted to the State Duma.

RenCap analysts also commented that Gazprom’s operating results for 1H24 were within their expectations. 

Gas production in the reporting period increased by 16% to 208.14bn cubic meters from 179.45 bcm a year earlier. In 1H24 Gazprom supplied 186.7 bcm of gas to customers in Russia and abroad (versus 166 bcm in 1H23). 

In 1H24 there was an increase in  gas deliveries to Uzbekistan and Kazakhstan, an increase in exports to China, as well as consolidation of Sakhalin Energy, whose contracts now fall directly into Gazprom's portfolio. 

“We believe that in the second half of the year the results will be supported both in China and Europe due to the uncertainty surrounding the end of the contract for gas transit through Ukraine,” RenCap believes.