The Russian Ministry of Finance plans to reduce the discount used to determine the tax for the country’s petroleum exports from the current $25 to $20 per barrel.

Western sanctions imposed over Ukraine’s war against Russia, including the $60-per-barrel price cap mechanism for Russian petroleum exports and a ban on imports to the European Union, have forced the Kremlin to change the way petroleum sales taxes are determined.

In February, Russian President Vladimir Putin signed a law that fixed the discount for the Urals oil grade for tax calculations.

In an interview with a Russian news site, Russian Finance Minister Anton Siluanov said: “Now the discount is 25 dollars per barrel compared to Brent crude. We plan to reduce it to $20 per barrel. We are considering further measures to improve the tax calculation for petroleum exports.”

Siluanov did not elaborate on the measures under consideration, but added: “At the current price of about $80 per barrel of Brent crude, the ministry will collect eight trillion rubles ($88.5 billion) in petroleum and gas revenues by 2023.”

Russia’s petroleum and gas revenue in the first six months of 2023 decreased by 47 percent on a year-on-year basis, which was due to the lower price of Ural oil and lower natural gas exports.

The Russian Minister of Finance said: “By the end of the year, the budget deficit will be around two to 2.5 percent of GDP. We have enough resources to cover the planning expenses.”

Meanwhile, Russia’s Energy Ministry announced that the country is considering limiting the number of companies allowed to export petroleum products to combat illegal fuel exports, Reuters reported.