Fossil Fuels - At What Cost? Government support for upstream oil and gas activities in Russia

The report represents the first inventory of subsidies to upstream oil and gas activities in Russia according to an international methodology developed by the Global Subsidies Initiative of the International Institute for Sustainable Development.

The study identifies and, where possible, quantifies government support to Russian oil and gas production in the form of direct or indirect transfer of funds and liabilities, tax expenditures, provision of government-owned goods and services below market value, and income and price support in 2009-2010. It also considers possible future trends in oil and gas subsidies in Russia. The report concludes with a discussion of economic and environmental outcomes of the existing subsidies against their policy objectives.

The study aims to increase transparency of government subsidies to fossil fuels in Russia and provide a basis for an informed debate about opportunities to "rationalize and phase out over the medium term inefficient fossil-fuel subsidies that encourage wasteful consumption" in accordance with the commitments Russia has undertaken as a member of G-20 and the Asia-Pacific Economic Cooperation and in view of the country's accession to the Organisation for Economic Co-operation and Development.

The report is addressed to responsible agencies in the Russian government, academia, business and civil society organizations, and international stakeholders.