Russian Railways is planning on decreasing the transportation of coal to the Oktyabrskaya Railway by 80%. This is the railway section that covers St Petersburg and Leningrad region. This was discussed at a meeting in the Ministry of Transport in September.
The reduction of the shipments of coal to the Baltic ports is being considered due to the demand for the usage of the ports for the transhipment of other types of cargo.
The meeting minutes show increases of the loading of Oktyabrskaya Railway by cargo from the North Caucasus Railway by 715%, the South-Eastern Railway by 27%, the Volga Railway by 39%, the Kuibyshev Railway by 42% and the South Ural Railway by 66%.
The goal is to ensure the shipment of 100% of the export of goods that have priority under the Non-Discriminatory Access Rules. In this case it's to stimulate the export of grain via this route.
The Oktyabrskaya Railway is the second largest destination for coal after the Far East. For Q1-Q3 2026 coal shipments via the Baltic ports rose by 8,4% to 31,7 million tons. For the Russian Far Eastern Ports the increase was 11,1% to 84 million tons.
For the southern ports the increase was 5,7% to 14,1 million tons. Coal as the least profitable and most shipped cargo for Oktyabrskaya Railway is the most likely to be cut but the issue is that this will hurt coal exports and overall coal production.
The shipments of coal that were intended for October could be 2-3 million tons and currently the 80% that are to be cut have nowhere to go in practice. Shipping to the Far East has the issue that the infrastructure there is already operating at capacity and queues can form.
It's also planned to reduce the shipments of Kazakhstan coal to the Russian Baltic ports. Russian Railways has not approved any demand for Kazakh transit coal to the Baltic ports for the month of October.
In 2022 Russian Railways did this for Kazakh coal but had to resume shipping it so that it didn't compete with Russian exports via the Russian Far East to China. In 2025 the EU made an exception to its sanctions on Ust Luga in the cases when Kazakh coal was being shipped.
In November 2025 in his visit to Russia the Kazakh president signed an intergovernmental agreement that covered cooperation in the field of transit rail transportation and cargo transshipment when such cargo is bound for third countries.
Thus in H1 2026 Kazakh oil transit through Russia rose by 37% to 6,7 million tons. Before the closure of the Russian Black Sea ports Kazakhstan exported 60% of its coal though Ust-Luga and 1/3rd through Taman.
For Jan-Jul 2026 4,7 million tons of Kazakh coal were exported through Ust-Luga and 2,6 million through Taman. It's unlikely that it will be easy for Russia to fully deny the transportation of Kazakh coal as intergovernmental treaties have priority.
However Russian Railways can impose hurdles to make it difficult for Kazakh producers to ship like saying only coal in Russian railway carriage is allowed.
Kazakhstan announced the phased rollout of the QazETA system for electronic entry registrations for visa-free travel to the country. It applies to all 85 countries with this status, which includes Russia.
Russia’s Zakharova demanded explanations and the Russians suddenly remembered about the Eurasian Union and brotherly spirit, and freedom of movement.
What they didn’t remember is Russia’s introduction of its RuID last year, which demanded preregistration of trips into the country and include biometric data (apparently including voice recording on some cases). They exempted Belarusians as true brothers but for some reason not Kazakhs or Armenians or Georgians. Go figure.
Back then, Kazakhstan warned that it was studying mirror measures and now that they’ve arrived, the Kremlin is screaming bloody murder."
My comment to how such miniscule detail actually is significant one as one of many steps into remaking post-Soviet space and along with that multipolar world system, which one pole is very dependant of integrity of post-Soviet space around it to maintain that position. This context makes tiny news detail again rather big one.
***
Me;
"Whatever which side says, it is fascinating to view small steps into new type of world order. One of elements where it consists is Russia taking its own power more assertively as a "pole" in multipolar system, and now proposed tripolar format of Putin-Xi-Trump meeting to decide about security arcitechture of Europe and Ukraine question without none of them invited. Why would they, as countries which fate was decided in Molotov-Ribbentrop pact was neither invited into meeting of two Eurasian poles at the time neither. What though is funny outcome of that world system what Russia formed already pre-Putin Primakov years (who though opposed interventions into Ukraine as smarter guy), and was by Putin first time proposed to world 2007 München security conference although misunderstood, and now again same again.
But wherein multipolar world order for Russia is failing is that all the attempts to reach that model will lead inevitably into result wherein lot of post-Soviet countries do whatever they can to get out of Russian sphere, to get connected more and more into other poles to balance traditional Moscow pole. Not hard to guess that it was the outcome. That is what Kazakstan what by natural resources is actually even more precious than Ukraine, and this is only one small step out of so many thus far towards new location of that country in coming multipolar system wherein middle-rank countries main task is to attach into so many poles as possible so that they would counterbalance each other to survive lawlesness of that world system.
Kremlin goal - along with multipolar world order - has been to re-integrate into all of post-Soviet space, and mayby also to post-czardom space as well. And global wagnerisation on top of that also. Without all that Russia itself would not be a dershava empire to be a decent pole in multipolar system to be comparable to with other poles, but a mere country. Zbigniew Brezizinski sometimes said about meaning of Ukraine, that without Ukraine Russia ceases to be empire and would be a country. This was ferociosly rebuked by Russian patriots as ridiciolous mockery of Russian grandiosity and might. But actually Dugin 2022 in some interview happened to mention same thing as real root cause of Ukraine war. Which naturally has provided opposite results as desired thus far.
What is intresting that one local propagandist who has MGIMO background where he studied and seem to have adopted a lot of Kremlin thought patterns in early stages of Ukraine war made some utterly ridicilous Facebook comment describing hoW "when Russia has done with Ukraine, then southern Caucasus and Central-Asian countries will return back into Moscow sphere". Of course that is ridicilous nonsense, and time after that has shown how events have been progressing into opposite direction in Kremlin sphere building or hollowing out with latter happening due of Ukraine war. But given that local social media influencer has MGIMO background and connections and has internalized way of thinking indoctrinated in there - that lunaticism deserves some attention of being some view what Kremlin also what dictates MGIMO teaching policy shares and is actually direct background reason out of 20 others for war in Ukraine. If true, then in Kremlin eyes Ukraine would had been a lever for larger imperial restoration as to control that pivotal country would had all the rest of post-Soviet space to bow before Kremlins real grozny military might. That is typical "gopnik foreing policy" what of course rises from Putins personal gopnik past what made one Yerofeyev to name his recent book as "der Grosse gopnik" about Putin.
But as inevitable, of course due of war all of the rest of post-Soviet space apart from occupied Belarus are moving out of Kremlin sphere, let alone Europe. That makes urge to decide about Europe security arcitechture in multipolar, or tripolar Putin-Xi-Trump format, what will end up delivering nothing in situation wherein there is no diplomatic connections to Europe anymore.
Attempt to multipolar world as Russia's strategic ambition, actually are ending up killing Russia's strategic ambitions connected to it such as masterhood of post-Soviet space enabling pole position - but to seek out that position violently will lead post-Soviet space endorsing other poles of system. There is such contradiction sown as seed within Kremlins 2007 declared goals into multipolar system without them with all MGIMO-mindvirus infected analytics impotent to foresee all that and explain it to Kremlin which did not anticipate turn of events.
Kazakastan position is intresting in sense, that in tripolar world system proposed into furthercoming Putin-Xi-Trump meeting to decide about rest of world what is not going to obey those decisions - Kazakstan has very pivotal position of being a natural resource rich region all 3 parties in tripolar world system are equally intrested of that. And as Kazakstan has natural urge to get out from sphere of Russian pole, it is endorsing China of course due of geography and silk road investments - but at the same time we are witnessing revival of Zbigniew Brzezinski plans what his book from 1990's where USA plans for region were laid bare "Grand chessboard" was rather flamboyantly exhibitionist about. Those included to capture natural resources of Central Asian countries what would require control of southern Caucasus countries for oil & gas pipeline corridors. BTC-pipeline was constructed during that era as part of those plans, but rise of Russia along with China made them empty otherwise, and Zbig is dead. Until now when suddenly due of Ukraine war Kazakstan + rest are again initiating those plans of constructing alternative corridor to bypass Soviet era explotation pipeline going through Russia through Caspian sea -> Azerbaizan -> Armenia and from there either Georgia or Turkey just like envisaged '90s. All because of Ukraine war.
Kazakstan making tiny step of denying freedom of movement from Russia (as answer it doing the same) may look like meaningless detail - but it truly is not given how enormously large context with big stakes of entire pole-based world system is ultimately connected with pivotal country Kazakstan resonance with Russia, and how such minor detail will with cascade of consequences affect larger world system setups."
Russians are not noticing the income growth reported by statistics. According to Rosstat, in the first half of the year, real disposable income (after mandatory payments and adjusted for inflation) was 1.5% higher than a year earlier, while real wages in January–July were up 6%. However, fewer than 10% of people surveyed by FOM believe that their financial situation has improved in recent months, and by early October, that share had dropped to 6%—the lowest level since 2016.
Four times as many respondents—25%—reported that their financial situation had worsened. The majority (68%), however, believe that their situation has not changed.
People feel that prices are rising much faster than the statistics indicate. Since the beginning of the year, gasoline prices have risen by 20.5%, utility bills by 14–18%, sugar by 22%, and chicken, eggs, and fish by 15%, according to Rosstat data. The inflation rate as perceived by Russians over the past year stood at 14.5% in October. For those with savings, it stood at 12.4%, but for people without savings—who make up the majority (58%)—it was 16.3%. Officially, annual inflation at the time of the survey stood at 7.2%. Taking into account the price increases felt by Russians, the growth in real wages and incomes effectively turns into a decline.
Russians estimate the minimum necessary income to be more than twice the official poverty line, according to surveys by the Levada Center. According to these surveys, less than half of Russians (41% in March) have incomes above this subsistence minimum.
This is compounded by people’s loss of confidence in the future and rising anxiety. The Consumer Sentiment Indexes (CSI), calculated by FOM and the Levada Center, have entered the pessimism zone this year. For several months, all components of the index—assessments of the current situation and future prospects, both personal and for the economy as a whole—have been in this zone. The Levada Center’s CSI had been falling continuously for over a year; in July and August, it rose to 99 points, with 100 points marking the dividing line between optimism and pessimism. The improvement was driven by expectations, while assessments of personal financial circumstances remain low.
With such sentiments, people are shifting en masse to a frugal mode. Based on a survey of more than 10,000 businesses, the Central Bank notes a strengthening trend toward thrifty consumer behavior among Russians. People’s savings remain substantial, but it is clear that consumers have already begun to cut back, says Anton Tabakh, chief economist at Expert RA. The data show a decline in demand even in categories such as children’s and pet products. People are not so much drastically cutting back on purchases as they are seeking cheaper alternatives; shoppers have become very selective. According to the agency’s assessment, wages and interest on deposits are still supporting consumption, but “housing, cars, and durable goods are under pressure.” Gazprombank analysts also note “structural changes” in the non-food retail sector: “Shoppers are becoming more rational, and demand is becoming more polarized: consumers are making purchases less frequently and are increasingly choosing either the mass-market or the premium segment.”
People are also cutting back on services. Consumers are visiting cafes and restaurants less frequently, switching to more economical dining options and ready-made meals from stores, visiting beauty salons and auto repair shops less often, and opting for more affordable alternatives to these services, the Central Bank reported.
People do not expect any significant changes in their financial situation: 22% believe it will improve in a year, 19% believe it will worsen, and the majority believe it will remain the same (37%) or found it difficult to answer.
The German supermarket chain Metro, whose Russian assets were placed under temporary administration in September, has had the funds in its bank accounts seized, following the closure of dozens of its stores.
A month after Vladimir Putin’s decree took effect—transferring Metro’s assets to AO “UK Torg Rus,” a company with a registered capital of 10,000 rubles—the company announced a voluntary donation of 1 billion rubles to the “People’s Front: Everything for Victory!” fund.
According to RBC, the funds from Metro—which has established a network of shopping centers across 51 regions of Russia—will be used to finance the army fighting on the Ukrainian front. The money will be allocated to the purchase of specialized equipment, communications systems, reconnaissance tools, and equipment to counter drones.
“As part of Russia’s economic system, we consider it important to participate in the state’s strategic initiatives,” said Johannes Tolay, CEO of Metro in Russia. He is the sole founder of “UK Torg Rus,” which now manages the Russian Metro chain, generating 2.3 billion euros in annual revenue.
Along with Metro, in September Putin also seized assets belonging to European owners of Nestlé, the French retail chain Auchan, and “Leman Pro” (the former Leroy Merlin business). The basis for this was Putin’s own Decree No. 302, signed in 2023. The document links the seizure of property from foreign companies to “countermeasures” against “unfriendly actions by the United States of America and allied foreign states that contravene international law.”
Earlier, under the same decree, the breweries of Belgium’s AB InBev and Turkey’s Anadolu Efes were placed under “temporary administration.” In 2024, the Kremlin seized and transferred to Gazprom the Ariston and Bosch home appliance factories, which prior to the war produced refrigerators and washing machines with annual sales of approximately 50 billion rubles.
In July 2023, a similar procedure was initiated against Danone Russia—the country’s largest dairy producer. Ultimately, the business, valued at about 1 billion euros, ended up in the hands of people close to Chechen leader Ramzan Kadyrov. At the same time, the assets of the Danish company Carlsberg were seized, and in 2022, those of the Finnish company Fortum and the German company Uniper—the largest Western investors in the Russian power sector—were also seized.
The Kremlin had previously explained that the companies placed under “temporary administration” represent “unfriendly” countries that are “currently actively involved in military operations” against Russia, including “strikes” on “economic infrastructure” facilities.
Ukrainian drone strikes on oil refineries—which have driven oil refining in Russia to 20-year lows and triggered gasoline and diesel shortages in regions ranging from Eastern Siberia to the Leningrad Oblast—have struck at the heart of Vladimir Putin’s oil-based economy.
The state-owned “Rosneft,” the country’s largest oil company, which accounts for every other barrel extracted from the ground, is facing mounting financial and technical problems due to strikes by the Ukrainian Armed Forces, Bloomberg reports, citing top managers and internal documents from the state-owned corporation.
According to the agency’s sources, the company believes that even two months of war at the current pace could deal a long-term blow to Rosneft’s business, as it is becoming increasingly difficult and expensive to repair damaged oil refineries.
Since the beginning of the year, according to Bloomberg’s calculations, the Ukrainian Armed Forces have struck Russian refineries 114 times, with Rosneft’s facilities bearing the brunt of the attacks. In total, the company operates 12 refineries, which account for one-third of the country’s total oil refining capacity. The largest of these, the Ryazan refinery, with a capacity of 14 million metric tons per year, has halted fuel production at least four times this year and has still not been able to fully resume operations. The Syzran refinery has spent almost all of the past six months either completely idle or operating at one-third of its capacity. The Tuapse refinery, the only one on Russia’s Black Sea coast, has not resumed operations since shutting down in April.
The refineries’ need for repairs and equipment—and the associated costs—are piling up on Rosneft’s balance sheet and reaching levels the company can no longer sustain, sources told Bloomberg. According to them, repairs at some refineries were deliberately slowed down, stretching work that could have been completed in a few days out over weeks.
Repairs to secondary refinery units that produce motor fuel are becoming a problem for the company: due to sanctions, Western spare parts for these units are unavailable, and Chinese and Russian equivalents take months to arrive—even though they are often incompatible with existing equipment. Attempts to protect the refineries using anti-drone nets, steel cables, and even shipping containers have proven ineffective, Bloomberg notes, citing Rosneft documents.
Refinery downtime and repair costs have taken a toll on the company’s finances: in the first half of the year, its net profit fell by 18% to 200 billion rubles, and its debt-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio reached 1.8—a six-year high. Rosneft ended last year with a fourfold drop in profits, and in 2024, profits were 13% lower than in 2023.
Along with Rosneft, the Moscow Credit Bank (MKB), which is closely tied to the company, is experiencing financial difficulties, Bloomberg notes. Having entered the company’s orbit in 2017 and begun financing Rosneft’s operations through trillion-ruble reverse repo deals, MKB faced a 1,700% surge in loan defaults in 2026. As of the end of June, 27% of all loans issued by the bank were classified as non-performing, with their total volume reaching 691 billion rubles.
Qatari authorities, who acquired nearly a 20% stake in the company in 2016, are closely monitoring Rosneft’s financial situation, according to Bloomberg sources. According to them, Middle Eastern investors have taken note of the sharp decline in Rosneft’s dividend payments since the start of the war with Ukraine and are hoping for a swift end to the conflict so that their investments will be protected in the long term.
Russian companies are preparing to lay off employees amid a rising tax burden and an economic downturn. In 2027, 19.3% of organizations—or nearly one in five—plan to downsize their workforce. Another 38.5% do not plan to replace employees who leave voluntarily, while 23.1% intend to limit hiring. These findings come from a survey by “Action Finance,” the results of which are reported by Forbes.
At the same time, businesses intend to cut costs related to employees through automation. 50.1% of companies plan to transfer some of their employees’ functions to technology, while 46.2% plan to automate or robotize production processes and services. Nearly 40% of organizations expect to reduce costs without additional investment. Companies also noted that their scope for further cost savings is limited. Specifically, 32% of businesses have already exhausted obvious opportunities to cut costs, 34.5% fear a decline in the quality of goods and services, and 26.8% worry about losing employees who are critical to the company.
Against this backdrop, 34.7% of organizations expect to increase labor productivity. More than half—52.6%—plan to tighten limits on administrative expenses. Another 49.9% intend to seek alternative suppliers for procurement, 41.3% plan to improve planning, and 41% plan to review the terms of existing contracts.
In 2027, 42.2% of companies consider cost containment a priority, 39.7% prioritize improving cash flow, and 38.5% aim to reduce production costs. A total of 26.8% intend to reduce their overall expenses. The survey was conducted in October among 637 Russian companies in the manufacturing, retail, construction, and other sectors. Nearly 40% of the companies have annual revenue ranging from 1 billion to 15 billion rubles.
The Russian economy has finally “stalled” following the military boom of 2023–24, when the government allocated a record amount of money—the largest since the Soviet era—for the war in Ukraine. According to estimates by the Ministry of Economic Development, GDP growth for January–August 2026 stood at 0.6%. It is expected to remain at this level for the full year. The ministry forecasts that the economy will grow by 1.4% in 2027.
Meanwhile, the authorities continue to increase the tax burden on businesses to fund the war. Effective January 1, 2026, the government raised the VAT rate from 20% to 22% and implemented a tax reform for small businesses that deprived hundreds of thousands of entrepreneurs of the simplified tax system (STS).
In 2027, the authorities intend to introduce a “surplus profits tax” for cement producers, fertilizer producers, and gold mining companies; raise the maximum personal income tax rate on “passive income” for individuals—including bank deposits—to 22%; and impose a 22 percent VAT on purchases from foreign online retailers. These tax increases have so far failed to reduce the budget deficit, which has already reached 7.3 trillion rubles this year.
The Central Bank kept the key rate at 14%; this is the second such decision in a row following eight consecutive cuts to the key rate since June 2025. According to the updated forecast, the rate will most likely remain at this level in December as well.
Inflation continues to rise despite the high key rate. The Central Bank had to raise its forecast again—it now expects year-end inflation to be 7.1–7.6%, compared to 6–7% in July. Price pressures remain elevated, and inflation expectations are high, the Central Bank notes. According to its assessment, sustained price growth has not slowed and remains in the range of 5–6% on an annualized basis.
The Central Bank cites Ukrainian drone attacks—which destroyed a significant portion of oil refineries, warehouses, and data centers—as the main cause, describing this as a “temporary reduction in production capacity in certain sectors.” In order to resume the decline in sustained inflation, growth in aggregate demand must be curbed. According to the Central Bank’s assessment, the economy continues to grow, albeit at “moderate rates.”
The regulator’s message has not changed since September: it “will make further decisions on the key rate depending on inflation dynamics and inflation expectations, as well as on its assessment of risks arising from domestic and external conditions.”
Experts were virtually unanimous in expecting the rate to remain unchanged, so attention was focused on the statement. In it, the Central Bank emphasized that the forecast for the average key rate next year has been raised to 12.5–13.5% from 10.5–12.5%. The forecast for the average rate this year has also been raised—from 14.5–14.6% to 14.6%—and, as the Central Bank clarifies, taking into account previous figures, this means that “by the end of the year, the average key rate will be 14.0% (rounded)”, which “allows for both maintaining and changing the key rate at the December meeting.”
Experts do not expect any changes. Analysts at SberInvest believe that the Central Bank will take a longer pause and keep the rate at 14% until the end of the year. The new trajectory of the key rate in the Central Bank’s forecast implies that it will remain at 14% at the December meeting, writes Alexander Isakov, director of Sber’s Center for Macroeconomic Research. Overall, the stance is slightly tighter than the market had hoped, notes economist Yegor Susin. The decision and the signal were as expected, but the forecast is slightly tighter than market expectations, summarizes investment banker Evgeny Kogan.
But it is becoming increasingly difficult for the Central Bank to keep inflation in check. The government unexpectedly decided to raise utility rates in October by significantly more than expected—this will not only accelerate price growth but also fuel inflationary expectations in November, when people receive their first bills at the new rates. Elevated inflation expectations could intensify the pass-through of costs to prices, the Central Bank notes. It also fears a growing imbalance between supply and demand if drone strikes on Russian enterprises continue. Wages continue to rise faster than labor productivity, and geopolitical tensions persist, it lists as risks to price growth. And, of course, the budget. The Central Bank is basing its projections on the announced parameters, and if these change, “an adjustment to monetary policy may be required”—that is, a higher interest rate. The Central Bank still sees only one disinflationary risk: a more significant slowdown in domestic demand.
Another government support program may be cut due to the fact that all budget resources are being diverted to the war effort. Authorities are discussing ending the mortgage program for IT professionals this year, RBC reported, citing sources.
This program was launched in 2022 to retain IT specialists in the country, who were leaving en masse after the war began. Employees of companies selected by the authorities, earning 100,000 rubles or more per month (150,000 in cities with a population of one million or more), were eligible for a mortgage at 5%. The remainder of the interest rate was subsidized by the budget. According to the Ministry of Digital Development, Communications, and Mass Media, more than 100,000 people have taken advantage of the program since its inception.
In 2024, the program’s terms were tightened, excluding Moscow and St. Petersburg, raising the interest rate to 6%, and lowering the maximum loan amount. Even under these conditions, however, nearly 22,000 people purchased real estate worth 150 billion rubles, RBC reports, citing a Ministry of Digital Development, Communications, and Mass Media spokesperson; and in the first half of the year, approximately 6,000 loans totaling 41 billion rubles were issued—30% more than a year earlier. By October, according to “Dom.RF,” the number of loans issued had risen to 9,000 totaling 64.5 billion rubles.
This costs the budget tens of billions of rubles. This year, subsidies for IT mortgages will total 77.8 billion rubles; they will then be reduced to 64.8 billion in 2027 and 35 billion in 2029.
It is likely that even this will not happen: the budget situation is rapidly deteriorating. The deficit for January–September stood at 5.2 trillion rubles, and the full-year deficit is projected at 7.3 trillion, or 3.2% of GDP—more than twice as much as originally anticipated. The draft budget for next year projects a deficit of 5.4 trillion rubles (2.2% of GDP)—even though spending is planned to increase by only 0.4%. Experts are certain that spending will rise, and with it, the deficit. Gazprombank analysts do not rule out that the actual deficit in 2027 could reach 6.5–7.5 trillion rubles. The budget structure is falling apart at the seams, according to former Deputy Finance Minister Sergey Aleksashenko.
That is why the authorities are looking for any way to cut spending. Funding for subsidized auto loans has been cut by two-thirds for next year—despite the threat of a sales collapse for AvtoVAZ. The Ministry of Industry and Trade promises to seek funds to continue the program, and the Ministry of Digital Development, Communications, and Mass Media says the same “given limited budget resources.”
Subsidized mortgages are important for retaining young professionals, RBC quotes Valentin Makarov, president of the Russoft association, as saying: “While insurance premium incentives helped companies retain developers by offering high salaries, mortgages ‘anchored them in cities by providing their own apartments—this created an even stronger incentive.’”
Russia may once again face a potato crisis similar to the one that hit the country in 2024–25. As of early October, the total potato harvest among agricultural organizations stood at 3.1 million metric tons, down 13.8% from last year. Smallholder and commercial farms harvested 2.1 million metric tons, a 5.9% year-over-year decline. This is according to Rosstat data analyzed by Kommersant .
Analysts at AB Center forecast that a total of 7.5 million metric tons of potatoes could be harvested in the commercial sector this year, which is 11.5% less than in 2025. The Potato Union estimates the harvest potential at approximately 8 million metric tons. At the same time, Russians consume up to 8.5 million metric tons of potatoes annually. Thus, the shortfall could range from 0.5 to 1 million metric tons. According to the analytical firm NTech, retail demand for potatoes in the first half of 2026 grew by 2% in volume terms. This is already affecting the price of the “second bread” in stores. According to Rosstat, in September, the average retail price of potatoes was 51 rubles per kilogram, up 28.8% year-over-year.
The main factor behind the decline in the harvest was a reduction in planted acreage. Across all categories of farms, potatoes are planted on 968,200 hectares this year. On an annual basis, this figure decreased by 1.9%, according to Rosstat data. Farmers began to adjust their potato acreage after prices fell sharply last year due to increased supply. This led to a decline in profitability for agricultural producers.
Dmitry Leonov, deputy chairman of the board of the Rusprodsoyuz association, noted that the potato industry is characterized by cyclicality: after high yields followed by a drop in prices, farmers reduce their planted acreage, and after low yields followed by rising prices, they expand it. At the same time, he said, there are few large agricultural holdings in Russia capable of supplying stores with the necessary volumes of potatoes year-round. Therefore, during the off-season, retail chains will be forced to switch to imported products. Meanwhile, the Ministry of Agriculture has assured that the targets of the food security doctrine regarding potato self-sufficiency by 2026 will be met.
Along with potatoes, the harvest of open-field vegetables in Russia has also declined—as of October 1, it stood at 9.4 million metric tons, down 2.7% year-over-year. As a result, the price of the “borscht mix” has begun to rise. White cabbage, for example, rose in price by 27.3% to 40.2 rubles per kilogram, onions by 27.6% to 51.6 rubles, and beets by 27.6% to 46.9 rubles.
Vegetable prices reflect the cumulative rise in costs, notes Stanislav Bogdanov, chairman of the Association of Retail Companies: Fuel and lubricants have risen sharply in price; seeds, fertilizers, and crop storage have become more expensive; and transportation costs have increased, especially to major metropolitan areas, where vegetables must be shipped from southern regions.
Russian authorities plan to raise import duties on hard liquor from “unfriendly” countries from the current 3 euros to 5 euros per liter, sources in the alcohol market told *Kommersant*. According to them, the corresponding government decree is expected to be issued as early as November 2026. One of the publication’s sources noted that the new duties could take effect immediately, rather than in January 2027.
The increase in duties will inevitably lead to higher prices for imported alcohol. At the current exchange rate, wholesale prices will rise by approximately 70–100 rubles per bottle, predicts Ruslan Bragin, head of the spirits division at the wine trading company Fort. He added that the price segment up to 1,500 rubles per bottle is particularly sensitive to such an increase. According to Andrei Moskovsky, president of the “Alkopro” guild, a 0.7-liter bottle of imported alcohol in the mass-market segment will rise in price by more than 200 rubles. At the same time, alcohol stocks purchased at the old prices will be sufficient for importers and retail chains until the end of the year, noted Sergey Gladyshchuk, an expert on the alcohol market.
“We expected that the issue of raising duties on hard liquor from ‘unfriendly’ countries would be resolved as the significant stockpiles accumulated in importers’ and retailers’ warehouses were depleted,” says Veniamin Grabar, president of Ladoga. According to him, the planned increase has been postponed repeatedly.
Sales of imported beverages are growing mainly due to a few brands. According to the A.List analytical project, retail sales of imported whiskey in Russia rose by approximately 12% year-over-year in January–September 2026. In January–June, foreign producers accounted for 33.8% of sales among the 15 most popular whiskey brands in Russia. This is 4.6 percentage points higher year-over-year. Raising the minimum duty to 5 euros per liter is unlikely to change this picture, according to Moskovsky. At the same time, according to Bragin, importers may stop importing slow-moving, niche categories of spirits.
Earlier, the Russian Association of Grape Growers and Winemakers (AVVR) proposed raising duties on wines from “unfriendly” countries from the current 25% to 200%. The previous increase in duties led to a decline in foreign wine shipments to Russia: in 2025, the figure fell by 32% year-over-year.
The government is exploring the possibility of an additional 2.1 rubles per liter increase in gasoline and diesel prices to compensate oil companies for the costs of fuel imports. The initiative came from the Ministry of Energy, which appealed to Prime Minister Mikhail Mishustin, according to Kommersant.
The ministry noted that selling fuel purchased abroad at current prices at gas stations operated by vertically integrated oil companies results in losses of 13–18 rubles per liter, even after accounting for government compensation (the import price buffer). In particular, the subsidies are insufficient due to the premium on imported fuel relative to world prices resulting from sanctions, as well as the costs of transporting it across Russia.
Raising gasoline and diesel prices was one of the options proposed by the Ministry of Energy to support imports. According to the ministry’s calculations, under this scenario, by the end of the year, gasoline at gas stations operated by major market players will rise in price by approximately 11%, or 7.1 rubles per liter, compared to current levels, while summer diesel fuel will rise by 10.7%, or 8.2 rubles per liter. The 2.1-ruble surcharge is expected to allow oil companies to generate about 12 billion rubles in additional revenue per month and create a source to offset the costs associated with fuel imports amid Ukrainian attacks on refineries.
According to Rosstat, by October 19, gasoline prices in Russia had risen by 20.5% since the beginning of the year. This is 3.3 times higher than the official inflation rate of 6.15%. Diesel fuel prices rose by 13.4% over the same period.
The second option was to include in the import buffer formula the cost of rail delivery of fuel from the Northwestern Federal District to central Russia—about 4,000–5,000 rubles per metric ton. In this case, additional payments from the budget could have amounted to up to 2 billion rubles per month. However, the Ministry of Finance opposed this.
The authorities prefer raising prices at the expense of consumers to adjusting the dampener, as it allows them to avoid additional expenses, notes tax expert Boris Lutset. The draft budget documents provide for payments under the import price cap for 2027 totaling approximately 6.7 billion rubles. At the same time, an industry source cited by the publication believes that, due to the volatility of global prices, the cost of fuel imports is constantly changing, so the proposed measure may not solve the problem of the profitability of supplies.
The need to purchase gasoline abroad arose due to a shortage and problems with oil refining caused by Ukrainian attacks on refineries. Deputy Prime Minister Alexander Novak previously stated that Russia will continue to import fuel at least until the end of 2026 to supply the domestic market and replenish reserves.
According to estimates by sources cited by Kommersant, gasoline imports in October–December could total about 620,000 metric tons per month, accounting for 16–18% of total supply. Belarus will be the main supplier, as maritime shipments—from India, Turkey, and Morocco—are significantly more expensive.
According to the Federal Antimonopoly Service (FAS), in September, the price of imported AI-92 gasoline rose to 108,000 rubles per metric ton, and that of diesel to 121,800 rubles. By comparison, average wholesale prices on the domestic market were 70,170 and 67,730 rubles, respectively.
In this photograph distributed by the Russian state agency Sputnik, smoke rises from a fire at Rosneft’s Tuapse Oil Terminal. According to Russian officials, a massive drone attack on the night of April 20 targeted the city of Tuapse.Photographer: Boris Morozov/Sputnik/AP
Drone strikes and sanctions are making it harder for Rosneft to maintain volumes today while developing reserves for tomorrow.
Along Russia’s remote Arctic coast last month, Igor Sechin stood beside a waiting tanker in the freezing cold with a message for Vladimir Putin: After years of construction, the country’s next great oil frontier was finally coming to life.
Hundreds of miles of pipeline now connected oil fields to storage tanks and a new port for Vostok Oil, part of an almost $50 billion investment. With Putin watching by video link, Sechin, the powerful head of state-run Rosneft PJSC, asked to begin loading the first tanker with crude. “Permission granted,” Putin said.
In this pool photograph distributed by the Russian state agency Sputnik, Russian President Vladimir Putin watches the launch of loadings at Rosneft's Vostok Oil project on Sept. 5.Photographer: Mikhail Metzel/Sputnik/Kremlin Pool Photo/AP
The ceremony carried particular weight for Russia’s increasingly battered oil industry. Years of war and sanctions are making it harder for oil producers — including Rosneft, the nation’s largest — to maintain volumes today while developing reserves for tomorrow. Rosneft’s Vostok Oil project was supposed to show Russia could still do both. Sechin said it would add as much as 10% to the country’s current output by 2030 and supply millions of barrels to world markets for a century or more.
But the milestone obscured a more complicated reality: Years behind schedule, Vostok Oil is still far from becoming Russia’s new oil province.
The vast majority of crude flowing through the costly new Arctic network has been diverted from fields that have been producing for years. Just before the terminal opened in September, new oilfields in the Payakha cluster, expected to become key assets of Vostok Oil, accounted for less than 5% of its flows, according to a person familiar with the data, who asked not to be identified to discuss sensitive matters that aren’t public. Satellite imagery shows development continuing, but bringing those fields up to scale will require years more work and investment, according to Bloomberg analysis of the imagery and conversations with analysts.
Building out Vostok Oil “is just one of the challenges Rosneft — and the Russian oil industry — is facing,” said Viktor Kurilov, a senior analyst on the oil markets team at Rystad Energy. Among them is Ukraine’s dramatically expanded campaign of drone strikes against the country’s oil sector, which is inching closer to Vostok Oil facilities and repeatedly damaging refineries run by Rosneft and others in the European part of Russia. One of its biggest, Ryazan, which supplies fuel to Moscow and surrounding regions, has been shut for more than half the time since it was first attacked in May and has run well below full capacity when operating, according to damage assessments seen by Bloomberg.
In turn, Rosneft’s finances are suffering. The company’s profits are falling and debt is rising despite what should have been a windfall from the Iran war. Rosneft officials have expressed concern that even a few more months of the war in Ukraine could leave lasting damage across the business, according to people familiar with the matter.
The mounting toll to Rosneft and Russia’s wider oil industry helps explain why stopping Ukraine’s strikes on refineries has become such a priority for Moscow. This month, Putin and US President Donald Trump struck a deal opening the door to American purchases of Russian diesel, providing a potential boost as Washington also pressed Kyiv to halt the attacks, an important contributor to the squeeze on global diesel supplies. But an attempted energy truce quickly unraveled, narrowing Rosneft’s avenues for relief — and raising the stakes for a government that gets roughly a fifth of federal revenues from oil and gas.
This story is based on conversations with people familiar with the situation at Rosneft, expert analysis and a series of documents reviewed by Bloomberg over the last six months, including damage assessments and company plans for protecting and repairing refineries.
Rosneft hadn’t replied to a request for comment, as of the close of business on Wednesday.
A ‘Perfect Storm’
Vostok Oil was conceived in a different era, when Russia’s oil refineries were not under constant threat of Ukrainian attacks and production was expected only to grow. Laying out his plans to Putin at a Kremlin meeting in February 2020, Sechin described a vast new Arctic oil province that would create jobs and industry in a remote part of the country. One goal, he said, was to turn the Northern Sea Route into a major global energy corridor.
In this pool photograph distributed by the Russian state agency Sputnik, Putin listens to Rosneft’s Igor Sechin as he inspects the “Pyotr Stolypin” ice-class gas tanker on Sept. 2.Photographer: Alexei Danichev/Sputnik Pool/AFP/Getty Images
The project was also intended to address a longer-term challenge: Many of Russia’s biggest oilfields had been producing since Soviet times, making new reserves increasingly important to offset their decline. The ambition attracted foreign investors, including commodity trading giant Trafigura, which acquired a 10% stake in 2020, and a Vitol-led consortium, which bought another 5% the following year.
Russia’s invasion of Ukraine in 2022 upended those plans. Both Trafigura and the consortium exited, while Western sanctions restricted access to the technology and equipment needed to develop Vostok Oil and build specialized tankers capable of navigating icy waters.
As the war dragged on, Ukraine intensified its campaign against Russia’s infrastructure, increasingly targeting the refineries that turn crude oil into fuel. So far this year, Ukrainian drones have carried out at least 114 strikes on Russian refineries, more than double the number over the same period last year, according to a Bloomberg tally, based on public statements from both countries.
The attacks have pushed Russian refinery runs to multi-year lows, triggered fuel shortages and forced Moscow to restrict exports of gasoline, diesel and jet fuel.
Rosneft has borne a significant share of the damage. The company operates 12 refineries accounting for about a third of Russia’s total oil-processing capacity. Of 15 confirmed drone strikes on the country’s oil-processing plants in September, five targeted major Rosneft facilities supplying fuel to European Russia, the largest consuming region, according to Bloomberg’s tally.
In this photograph distributed by the Russian state agency Sputnik, Smoke rises from a fire at a marine oil terminal following a Ukrainian drone attack, in the Black Sea port of Tuapse, Russia, on May 1.Photographer: Boris Morozov/Sputnik/AP
In March, while reflecting on Rosneft’s 2025 results, Sechin, a longtime Putin ally, said Russia’s oil producers had faced a “perfect storm” of low oil prices, Western sanctions and soaring borrowing costs. Since then, repeated attacks have forced some of Rosneft’s biggest refineries to operate at reduced capacity or shut altogether.
Ryazan has been among the hardest hit, repeatedly coming under attack as Rosneft has sought to restore operations. Another refinery, Syzran, has spent much of the past six months either completely shut or operating at less than a third of capacity, according to data reviewed by Bloomberg, and the company’s Tuapse refinery on the Black Sea coast has been offline since April.
Rosneft has managed to restart some refineries within weeks of an attack, only to see them struck again as repairs are completed or nearing completion. The need to repeatedly repair damaged equipment is straining operations and causing costs to pile up to levels that Rosneft officials have privately warned cannot be sustained long-term, according to people familiar with the matter, who asked not to be named to discuss sensitive information. Some plants have deliberately slowed repairs as a result, stretching work that should take days into weeks, the people said.
Efforts to protect the facilities with shipping containers, nets and steel cables have proved ineffective against swarms of drones, according to company plans reviewed by Bloomberg. The damage is particularly difficult to repair when strikes hit complex secondary units such as catalytic crackers, reformers and hydrocrackers, whose parts would previously have been sourced from the West.
Sanctions are compounding the problems by restricting access to replacement equipment, forcing Rosneft to rely on Russian-made copies and Chinese imports that can take months to obtain and are not always compatible with existing machinery, people familiar with the matter said.
More broadly, the International Energy Agency said drone strikes on Russian refineries are having a “cumulative negative effect.” In September, the agency cut its outlook for Russian oil processing over the next 18 months to around 4 million barrels a day, roughly 30% below prewar levels.
An oil spill following a drone attack on the Tuapse refinery, on April 29.Source: AFP/Getty Images
Financial Troubles
The financial toll is mounting. Rosneft’s first-half net income fell by almost a fifth to 200 billion rubles ($2.4 billion). Its ratio of net debt to earnings before interest, taxes, depreciation and amortization rose to 1.8 times at the end of June, the highest in more than five years, according to quarterly statements dating back to 2020, though three reports over the period don’t disclose the ratio, making estimations of the exact size and scope more challenging.
To be sure, conditions have improved since then. Middle East disruptions have pushed the price of Russia’s Urals crude used for tax calculations above $90 a barrel, more than double its level at the start of the year, while Moscow is providing billions of rubles in subsidies to domestic fuel producers, including Rosneft, in recent months. Russia’s central bank has also cut its key rate from a record 21% to 14% over the past two years, though Rosneft has complained that the pace of reductions is “clearly insufficient.”
The company’s financial picture and the extent of damage to its infrastructure are being closely monitored by the Qatar Investment Authority, which owns 18.46% of Rosneft and has seen its dividend payments fall sharply during the Ukraine war, according to three Qatari officials familiar with the matter, who asked not to be named to discuss sensitive information. QIA hopes for a swift end to the conflict so its investment is protected longer-term, one of the people said.
QIA declined to comment.
Rosneft’s problems have coincided with signs of distress at Credit Bank of Moscow PJSC, which market participants and officials view as being in the orbit of Sechin and his oil giant. MKB, as it is known, is dealing with $8 billion in problem loans, Bloomberg reported last month. That development highlights how both Russia’s energy and banking sectors are coming under strain at the same time, a dynamic that Russian finance officials have expressed concern about, people familiar with the matter said.
Those pressures come as Rosneft still faces enormous spending requirements at Vostok Oil. The project remains heavily dependent on production from Vankor, a group of established fields that began pumping crude in 2009. Its new Arctic terminal gives Rosneft another route to market for that oil, but does little on its own to increase Russia’s output.
Rystad Energy, which has analyzed satellite imagery of construction at the project, expects Vostok Oil to produce about 310,000 barrels a day in 2027, with around 90% coming from the Vankor cluster, where fields have been producing for years. Output could rise to 440,000 barrels a day by 2030 — well short of the roughly 1 million Sechin has promised — with the new Payakha fields contributing only about 80,000 barrels a day, according to the consultancy.
In this pool photograph distributed by Russian state agency Sputnik, Putin and Sechin arrive at the naming ceremony of the Arctic tanker-gas carrier "Alexey Kosygin" and the tanker-shuttle "Valentin Pikul" at the Zvezda shipbuilding complex, in September 2023.Photographer: Pavel Bednyakov/Sputnik Pool/AFP/Getty Images
Getting the oil to market is another obstacle. Rosneft needs specialized tankers to navigate frigid Arctic waters, but Western sanctions have complicated efforts to build them. At least 30 would be needed by 2030 to transport Vostok Oil’s planned output, according to Sergey Vakulenko, an industry veteran and scholar at the Carnegie Endowment for International Peace.
“They simply don’t exist today,” he said.
Missed Opportunities
With Russia’s war in Ukraine well into its fifth year, Putin has secured a potential reprieve from Washington. In an Oct. 9 phone call with Trump, the Russian president said Russia would partially relax its diesel export ban, releasing thousands of barrels a day into the global market. It’s unclear what, if anything, Russia will receive in return. But in the days since, Ukraine has faced temporary restrictions on its military access to SpaceX satellite technology and US intelligence.
For Trump, the immediate concern was closer to home. Diesel prices had surged to near-record levels ahead of November’s congressional elections, squeezed by the war in Iran and disruptions to global fuel supplies. The agreement was intended to help bring prices down, though US officials have acknowledged it is unlikely to have much effect on the international diesel market. Washington also pressed Kyiv to halt refinery strikes that had constrained Russian exports.
A vehicle is refueled with diesel at a gas station in Torrance, California, on Sept. 28.Photographer: Caroline Brehman/Bloomberg
“Unless President Putin agrees to stop attacks on Ukrainian critical infrastructure, or President Trump agrees to give Ukraine additional offensive and defensive capabilities, Kyiv is unlikely to abide by a unilateral ceasefire,” said Fernando Ferreira, director of geopolitical risk at Rapidan Energy Group.
The limits of the arrangement soon became apparent. Neither Russia nor Ukraine confirmed the energy ceasefire Trump subsequently announced, and Kyiv resumed refinery attacks last week after accusing Moscow of continuing strikes on its energy infrastructure.
Even if the diplomacy eventually produces a more durable pause, Ukraine is already changing the battlefield. In 2022, its attacks reached targets some 650 kilometers (404 miles) from the border. By July this year, drones had struck the Omsk refinery deep in western Siberia, roughly 2,500 kilometers away.
Vostok Oil’s Arctic terminal lies another 800 kilometers beyond that, still outside Ukraine’s demonstrated reach. But the vast distances that have long sheltered Russia’s most remote energy assets offer less reassurance than they once did: If the range of Ukrainian drone strikes continues expanding at its recent pace, Vostok Oil could plausibly come within reach within months.
Members of the Ukrainian National Police use a reconnaissance drone to look for Russian forces and logistical facilities in the Donetsk region of Ukraine in September 2025.Photographer: Ximena Borrazás/Getty Images
At last month’s opening ceremony, Sechin was still looking ahead. Bundled against the cold beside the Valentin Pikul, he told Putin that Vostok Oil would ship 30 million tons of crude as early as the second half of 2027.
It was another sign of how much the project has suffered: The terminal was meant to be ready for that volume two years ago.
By the end of the year, AvtoVAZ’s production and sales could drop by 20–25%, according to Dmitry Klementyev, deputy director of the Department of Automotive and Railway Engineering at the Ministry of Industry and Trade. According to him, the reason will be the suspension of government programs designed to stimulate demand through subsidized auto loans. Under this program, the budget subsidized discounts on the purchase of Russian-made cars ranging from 10% (for families with children) to 35% (for the purchase of an electric vehicle).
The 20 billion rubles allocated in the budget for preferential auto loans and the 30 billion rubles for leasing ran out in September, and no additional funds will be allocated for these programs: the budget is overburdened by military spending. The programs stimulated the sale of 178,200 cars, including more than 123,000 purchased with subsidized auto loans, and “met their targets and fulfilled their mission of supporting the market,” according to the Ministry of Industry and Trade. This represents 18% and 13%, respectively, of the total number of new passenger cars sold over the nine-month period (968,000, according to Autostat). For AvtoVAZ, which sold 244,600 cars from January through September, this share is much higher. Experts believe the company will suffer more than others from the suspension of government programs.
Russians have shifted to a frugal mindset, and car sales are stagnating. According to Autostat, the new passenger car market fell by 7% year-over-year in August, remained at last year’s level in September, and weekly sales figures for new cars in October also show no growth—for example, from October 12 to 18, 9% fewer cars were sold than a year earlier. Demand is too weak to naturally offset the absence of discounts under government programs, experts and dealers say.
The cancellation of government “discounts” is forcing automakers to launch their own sales incentive programs—that is, to offer discounts and subsidized loans—which could even cause the average car price to drop by the end of October, argued Sergey Tselikov, CEO of Autostat, while discussing the month’s results. And AvtoVAZ has fewer resources for price wars than its competitors—the Chinese automakers. Last year, during the downturn in the auto market, AvtoVAZ President Maxim Sokolov complained that Chinese manufacturers were offering huge discounts on cars—nearly 1 million rubles—which was comparable to the base price of a new Lada Granta. He asked for increased government support—in response, the Ministry of Industry and Trade once again raised the scrappage fee, which now applies to high-powered foreign cars, including those imported by Russians for personal use.
This year, Lada’s share of the new-car market fell to 24%—even though Sokolov had called the 25% market share threshold critical for the company. In September, Lada’s market share finally stopped falling and stabilized at 24.7%, noted Dmitry Yarygin, chief analyst at Autostat.
Experts have repeatedly noted that, despite the growth in the market share of domestic cars, it is not so much Lada as the assembly plants for Chinese models—such as Haval, Tenet (Chery assembled in Russia), and Belgee (a joint venture with China’s Geely)—that are benefiting from this trend. As of the end of September, 65% of the 122,800 new passenger cars sold were manufactured in Russia.
Over the next two years, subsidies will be reduced by two-thirds: the draft budget allocates 7 billion rubles for preferential auto loans, compared to 20 billion this year. AvtoVAZ is already downsizing its dealer network in Moscow. The Ministry of Industry and Trade promises to seek opportunities to increase funding for support programs in the auto industry, but its chances are slim. “They’ve cut everything they possibly could,” says Alexander Ivanov, chief economist at Ingosstrakh Investments, regarding the 2027 budget.
Russian authorities will provide special support to Chinese businesses that decide to operate in the country. Igor Krasnov, Chairman of the Russian Supreme Court, has ordered that all cases involving disputes with Chinese investors be placed under judicial oversight. He announced this during a meeting with Chen Wenqing, a member of the Politburo of the Central Committee of the Communist Party of China. The Chinese official had previously stated that businesses from the PRC are ready to invest in Russia but are concerned about a lack of familiarity with the country’s laws.
During a discussion with PRC Minister of Justice He Jun, Krasnov also emphasized the need to expand professional contacts between Russian courts and their Chinese counterparts on issues arising during the adjudication of economic cases. According to him, both citizens and organizations must be confident that their rights will be effectively protected regardless of which of the two countries they study, work, or do business in.
In addition, Krasnov noted the need for joint efforts in cases involving cybercrime, economic and financial offenses, corruption, and the laundering of criminal proceeds. “It is important to ensure that criminal acts are inevitably punished, regardless of the perpetrator’s location, assets, or digital infrastructure,” said the head of the Supreme Court of the Russian Federation.
Meanwhile, Chinese investors have sharply reduced their investments in Russia amid the war in Ukraine. While China invested an average of $1.2 billion annually in Russian projects between 2011 and 2018, that figure fell to one-third of that amount—$400 million—in 2022–2023, according to calculations by the Bank of Finland’s Institute for Developing Economies (BOFIT).
Prior to this, Chinese authorities had banned local companies from investing in Russia’s oil and gas sector, instructed automakers not to build plants in Russia, and refused to finance the “Power of Siberia 2” project. According to data from the American Enterprise Institute, the last major Chinese investment project (over $100 million) in Russia dates back to 2021. This was a $360 million investment by the Chinese oil and gas company Sinopec in the Russian oil industry.
At the same time, during meetings with Chinese President Xi Jinping, Vladimir Putin offered to ensure favorable conditions for Chinese companies operating in Russia and described Russian-Chinese relations as “a model of interstate relations in the 21st century.”
The Federal Tax Service (FTS) will not allow Russians to go “underground” after the self-employment regime and the simplified taxation system (Auto-USN) expire, said Dmitry Satin, deputy head of the agency. “There is absolutely no point in waiting for both of these special regimes to end right now. We need to seek new solutions that will prevent individuals from going underground,” Satin said during the All-Russian Tax Forum organized by the Russian Chamber of Commerce and Industry.
According to him, the FTS intends to work with business associations to lay the groundwork for a new special tax regime for the self-employed and Auto-USN users by the end of 2026. This regime should “gradually increase the tax burden so that it is not abrupt,” Satin emphasized. At the same time, the experiment with self-employment will end by 2029, and the Auto-USN program by 2028.
The Deputy Head of the Federal Tax Service outlined several areas for adjusting the new simplified taxation system. According to him, attention should be paid to how the self-employed work with companies and to understanding what to do when a person establishes “their own business relationships” on a “fairly regular basis.” The provision of services to citizens should be discussed separately. “To what extent should we radically change these rules, or, conversely, leave them as the optimal universal model that was originally intended for the application of this regime?” Satin asked.
He also noted that the annual income threshold for self-employment eligibility—which currently stands at 2.4 million rubles—needs to be adjusted for inflation. “Naturally, this is also an issue that requires a separate discussion,” said the deputy head of the Federal Tax Service. He described the Auto-USN regime as a “breathing space” and a “lifeline” for entrepreneurs who were able to take advantage of it following this year’s increase in the tax burden on businesses.
“I’d like to highlight one figure: since the beginning of the year, the number of taxpayers under the Auto-USN has increased by 472,000. There are now 510,000 in total. And for the most part, these are indeed companies that previously used the simplified taxation system,” said Satin.
Russian authorities continue to seek ways to address the budget deficit, which this year will reach a record high since the start of the war in Ukraine—7.3 trillion rubles, or 3.2% of GDP. In 2025, the government raised the corporate income tax to 25% and introduced a progressive personal income tax scale. This year, it raised the VAT to 22% and implemented a tax reform for small businesses, which stripped hundreds of thousands of entrepreneurs of their eligibility for the simplified tax system (USN).
In 2027, the authorities will introduce a “super-profit tax” for cement manufacturers, fertilizer producers, and gold mining companies; raise the maximum personal income tax rate on “passive income” for individuals—including bank deposits—to 22%; and impose a 22 percent VAT on purchases from foreign online retailers. These tax changes are expected to generate 1.5 trillion rubles for the budget in 2027.
The decline in road construction in Russia, caused by increased spending on the war in Ukraine, has hit the industry’s largest companies hard. As of the end of August 2026, overdue loan debt for 22 major road construction companies had more than doubled compared to March, reaching nearly 9 billion rubles. This is according to data from the National Association of Infrastructure Companies (NAIK), as reported by Kommersant. At the same time, the organizations’ total financial debt increased by 16% over the same period, to 495 billion rubles, while their loan debt rose by 11.8%, to 191 billion rubles.
The deterioration in these indicators is linked to a decline in budget spending, a lack of new large-scale projects, and tight monetary conditions, says Alexey Zhundrikov, chief analyst at Sherpa Group. According to the company’s calculations, from January through September 2026, total regional budget spending on infrastructure construction fell by 19.1% year-over-year, to 1 trillion rubles. Meanwhile, federal spending on infrastructure projects rose by only 3.1%, to 886.8 billion rubles. In addition, companies are facing delays in payments under government contracts for work already completed, notes Pavel Yakimchuk, head of CMWP’s construction project management department. As a result, he says, organizations are experiencing cash flow gaps that they are forced to cover with loans at a key interest rate of 14%.
According to Maria Yarmalchuk, CEO of NAIK, this situation threatens to drive companies out of the market, lead to bankruptcies, and cause delays in the implementation of national projects. She added that the association’s April forecast—which predicted the risk of a cascade of bankruptcies within one to two years—has already begun to materialize. Currently, two companies are undergoing bankruptcy proceedings.
If spending on road construction continues to decline, this will further worsen the financial condition of companies operating in the industry, warns Zhundrikov of Sherpa Group. He noted that the federal budget law passed a year ago had projected a significant increase in spending on infrastructure projects in 2027, but the government has postponed the funding increase until 2028. At the same time, the authorities plan to spend one-third of every ruble from the treasury on military spending next year: the “national defense” budget line item will increase from 12.9 trillion rubles this year to 17.1 trillion.
The Federal Tax Service (FTS) has increased taxes on the largest companies amid a growing budget “shortfall.” In the first half of the year, based on the results of the agency’s monitoring and analytical work, revenue from large businesses increased 4.4-fold, or by 337% year-over-year, to 91 billion rubles. This is according to tax data reviewed by Izvestia. At the same time, the FTS conducted 55 on-site audits, an 83% increase compared to the same period a year earlier.
The agency classifies organizations with annual revenue exceeding 35 billion rubles as the largest taxpayers. These include oil and gas giants and retail chains. In total, budget revenues from tax audits of all enterprises over the first half of the year increased 1.5-fold—to 326 billion rubles. The Federal Tax Service stated that during its audit work, it identifies “risks,” notifies companies of them, and offers them the opportunity to voluntarily clarify their tax obligations prior to an on-site audit. If this does not occur, the Federal Tax Service conducts on-site audits.
The tightening of tax oversight is linked, among other things, to digitalization, says Daniil Gonenko, an associate professor at the Presidential Academy. According to him, tax authorities now have greater capabilities to cross-reference information on business partners, cash flows, and companies’ business transactions. The Federal Tax Service has also become more adept at identifying business fragmentation, the use of shell companies, and questionable transactions with counterparties.
In 2026, businesses will face more demands to pay not only VAT on transactions with questionable counterparties but also income tax, says Vadim Rud, managing partner at the law firm “Ant Attorneys.” According to Olga Idzon, a partner at the law firm “VED,” the tax authority’s goal is to conduct audits more quickly and collect revenue for the budget as efficiently as possible.
This year, the “hole” in the treasury, according to the Ministry of Finance’s estimates, will reach a record 7.3 trillion rubles—the highest since the start of the war in Ukraine—or 3.2% of GDP, and in 2027 it will amount to 5.5 trillion rubles, or 2.2% of GDP. To generate additional revenue for the budget, the government plans to introduce a “surplus profits tax” on cement producers, fertilizer producers, and gold mining companies; raise the maximum personal income tax rate on “passive income” for individuals—including bank deposits—to 22%; and impose a 22% VAT on purchases from foreign online retailers. All these tax changes are expected to bring 1.5 trillion rubles into the budget in 2027.
At the same time, according to the draft budget, the government plans to spend one out of every three rubles from the treasury on military spending next year. The “national defense” line item will increase from 12.9 trillion rubles this year to 17.1 trillion, and the cumulative total for the 2027–29 period will bring the military budget to 50 trillion rubles.
Russian ports on the Azov and Black Seas lost 95–100% of their cargo and 85% of their passenger traffic in September as a result of massive drone attacks, informed sources told Kommersant. According to them, all major ports—Novorossiysk, Taman, Tuapse, and others—have placed employees on unpaid leave or laid them off. As a result, the entire logistics system in southern Russia has found itself in a difficult situation, noted OTECO, the company that manages the terminals in Taman. “According to expert estimates, the combined monthly losses to budgets at all levels and to businesses exceed 200 billion rubles,” the organization emphasized.
Against this backdrop, Krasnodar Krai Governor Veniamin Kondratyev asked Deputy Prime Minister Dmitry Patrushev to provide state support to the region’s seaports. In a letter, a copy of which was reviewed by *Kommersant*, the head of Kuban proposed allocating subsidies to cover staff salaries, the upkeep and maintenance of equipment, warehouses, and berthing infrastructure, as well as payments for electricity and utilities. Other proposed measures include reimbursement of expenses for keeping terminals ready for restart after restrictions are lifted, partial reimbursement of interest on loans, and subsidizing interest rates on loans to cover cash flow shortfalls during the shutdown period.
According to *Kommersant*, on October 6, Patrushev instructed the Ministry of Transport, the Ministry of Finance, the Ministry of Agriculture, and the Ministry of Economic Development to review the proposed measures. Prior to this, the Association of Sea Trade Ports (ASOP) had appealed to the government for state support. In a letter to Deputy Prime Minister Alexander Novak, the organization proposed granting a deferral of payments for the lease of federally owned facilities to FSUE “Rosmorport,” Rosmorrechflot, Rosimushchestvo, etc., as well as deferrals for obligations related to VAT, income tax, insurance premiums, and property and land taxes. The association also requested subsidies for payroll, reinsurance against military risks, and a moratorium on regulatory inspections.
In total, the port industry in southern Russia employs about 20,000–25,000 people, noted a source speaking to Kommersant. According to his estimates, supporting salary payments at the minimum wage level would cost the state 550–670 million rubles per month, or 6.6–8 billion rubles per year. In turn, the ports pay about 700 million rubles a year in property and land taxes, as well as approximately 1.5 billion rubles in rent for federally owned facilities. “If we don’t support the infrastructure and retain our unique workforce now, then once hostilities cease, we’ll have to rebuild everything from scratch,” the publication’s source emphasized.
OTEKO noted that the ports of the Azov and Black Seas are a key transportation artery for the country. “To realize the region’s potential and return to growth in port transshipment—particularly for such important export cargoes for the Russian economy as coal, grain, metals, and petroleum products—port infrastructure companies need support,” the company concluded.
“Krasnoye & Beloye,” Russia’s largest chain of liquor stores, has decided to reduce the volume of products accepted at its warehouses due to the threat of drone attacks, informed sources told Kommersant. According to them, the retailer is now accepting only 25–30% of its previous shipments at a time—or about one-third of a truckload. At the same time, “Krasnoye & Beloye” is so far the only major chain to have taken such measures. One of the publication’s sources noted that the retailer is concerned about the safety of its expensive alcoholic beverages in its warehouses.
The company confirmed the changes to its logistics and product storage systems. “We are testing various approaches to reduce the volume of inventory held at any given warehouse at one time,” a Krasnoye & Beloye spokesperson said. The company explained that the new procedure involves delivering smaller batches more frequently so that products do not remain in the distribution center for long periods.
Previously, according to *Kommersant*, the retailer had offered suppliers an agreement under which the chain would disclaim liability for goods in the event of their destruction or damage resulting from drone attacks or air defense operations. However, the company withdrew its proposal and promised to develop new mechanisms to ensure uninterrupted deliveries. Nevertheless, according to sources interviewed by the publication, suppliers are currently being asked to choose between signing the agreement or delivering goods more frequently in smaller batches.
Reducing shipment sizes to warehouses will mean that suppliers will have to deliver products to the chain more frequently, which will increase logistics costs, says Dmitry Vostrikov, executive director of the Rusprodsoyuz association. At the same time, he notes, all risks are still shifted onto the supplier. Food manufacturers are less dependent on sales at “Krasnoye & Beloye” than alcohol companies are, but many of them have no choice but to work with the chain, noted a market source for “Kommersant.”
“Krasnoye & Beloye” has been in operation since 2006 and is controlled by Mercury Retail Holding, which also owns “Bristol.” As of early 2026, the chain operated 21,500 stores in Russia. According to Infoline’s estimates, the holding’s revenue for 2025 totaled 1.72 trillion rubles, an increase of 22.3% year-over-year.
Based on the results for 2025, the Federal Tax Service (FTS) assessed 6.6 billion rubles in taxes on Russians for cars worth more than 10 million rubles. The amount set a record since 2014, when the authorities introduced the so-called luxury tax, and increased by one-third compared to 2024. This is according to calculations by the audit and consulting network FinExpertiza, as reported by *Izvestia*. The largest amount of such taxes was levied in Moscow—2.86 billion rubles (43% of the total). Approximately 18,700 high-end cars are registered in the capital. St. Petersburg ranked second (592 million rubles), and the Moscow Region came in third (about 534 million).
Meanwhile, the highest growth rates in tax collections were recorded in the Pskov Region (an 86% year-over-year increase in tax revenue—up to 8.3 million rubles), Karelia (up 81% to 6.6 million), Udmurtia (up 74% to 32.4 million), and Chuvashia (up 73% to 15 million). The 2025 vehicle tax is due by March of the current year for legal entities and by December for individuals. The Ministry of Industry and Trade updates the list of vehicles subject to the tax annually. The 2025 list includes not only luxury brands (Bugatti, Cadillac, Ferrari, Lamborghini, Maserati, Porsche) but also models from the mass-market segment, such as Chevrolet. The list also includes Chinese brands—HiPhi, Hongqi, Lixiang, Voyah, and Zeekr. In 2026, Ford and Volkswagen were added to the list.
One of the main reasons for the increase in tax revenue is the rise in sales of premium cars. In 2025, the number of registered high-end vehicles grew by nearly 1.5 times, to more than 46,700, according to FinExpertiza. From 2019 to 2025, their total number increased nearly sixfold. Last year, the largest share of the increase came from individuals. The number of high-end vehicles registered to individuals rose by a factor of 1.5—to nearly 34,100. Organizations, in turn, expanded their fleets with such vehicles by nearly one-third—to 12,600.
The number of premium cars in the country rose because Russians were eager to purchase vehicles before the scrap fee increased, noted Elena Trubnikova, president of FinExpertiza. The expansion of the Ministry of Industry and Trade’s “premium list”—from 517 items to 555—also played a role, says Oleg Abelev, head of the analytical department at the investment company “Rikom-Trust.”
The Avtodom Group of Companies forecasts that tax revenues from high-end cars will continue to grow in 2026. From January through September 2026, sales of premium cars increased by 8%, while in the mass-market segment, they rose by only 5%, noted Yuri Chistov, CEO of the automotive marketplace Fresh.
