Putin instructs government to solve problems related to price cap on Russian oil exports

By Elena Teslova

MOSCOW (AA) - Russian President Vladimir Putin instructed the government Wednesday to settle issues stemming from the price cap on Russian oil exports agreed by Western countries so that it will not cause problems with the budget.

Speaking via video conference in Moscow, Putin said additional income of the Russian budget in 2022 not related to sales of energy resources amounted to 200 billion rubles (about $2.9 billion).

However, as the energy sector is key to the Russian economy, Putin asked Deputy Prime Minister Alexandr Novak whether domestic oil and gas companies are coping with the problem "created using political mechanisms and tools."

Novak replied that the biggest risks are the discount on Russian oil, the embargo on oil products and the price cap, promising to "react" and "take necessary measures" to build new logistics and transport routes to new markets.

"I hope that this situation will be temporary. The discount should decrease over time, as we observed during 2022, when in March-April the discount increased significantly and then began to gradually fall and halved," Novak said, noting that the discount increased because the price for freighting vessels for the transportation of the Russian oil had jumped after the introduction of the price cap.

He added that companies had already signed contracts for oil deliveries in February and that they strictly adhere to the principle of non-cooperation under the agreements, alluding to the price cap.

Putin assigned several tasks to the government, including expansion of foreign economic relations and building new logistics corridors, increasing the technological capabilities of the Russian economy and strengthening financial sovereignty.

He stressed that development of the country must be ensured despite external pressure and threats.

"I stress -- we guarantee the security and interests of the country. We will increase our defense capabilities. Of course, we will solve all problems related to the provision of the Armed Forces, the units involved in the special military operation," he said.

Putin noted that negative predictions about Russia had not come true and praised efforts by Prime Minister Mikhail Mishustin and the government in meeting challenges.