by Nina Achmatova

The budget fails to realize the election promises made by the head of the Kremlin. The government finds necessary funds from the coffers of the state Rosneftegaz, undisputed reign of Putin loyalist, Igor Sechin. Open war on the privatization of oil.

Moscow (AsiaNews) - The energy sector has once again become a battleground between the liberal wing of the government and President Putin. This takes place on the eve of the discussion in the State Duma of the 2013-2015 budget, the 1st of October. The head of the Kremlin, Vladimir Putin, has reprimanded the government for presenting a budget that, in fact - with the revenue available - recognizes the unsustainability of his campaign promises (including an increase in pensions). In response to criticism, the Ministry of Finance has found the budget funds for the implementation of presidential plans: proceeds from the state Rosneftegaz, headed by former energy minister and architect of Putin's energy policy, Igor Sechin (pictured left). These funds were previously considered untouchable.

The proposal of the Prime Minister Dmitri Medvedev is include in the budget, 95% of 130 billion rubles (4.2 billion euro) of dividends collected by the public company with its shares in Gazprom (11%) and the major proliferation Rosneft (75%), headed by Sechin. In this regard, the same Sechin had already been accused of "conflicts of interest" by the Deputy Prime Minister Arkady Dvorkovich (Medvedev loyalist).

The Prime Minister promised that the Rosneftegaz funds will be spent not only to achieve the decrees of the president, but also for development projects in the Russian Far East, Putin's key campaign promise.

The move by Medvedev has a clear political side. According to analysts: the "expropriation" of Rosneftegaz, as some newspapers have called it, makes the aims of Sechin (a bitter enemy of the Prime Minister) to expand state presence in the Russian energy through the participation of its Rosneftegaz in the vast program of privatization of the sector, economically unfeasible.  The powerful former minister and long time ally has complained to Putin, but the head of the Kremlin so far has made no comment. Probably it will come to a compromise along lines already suggested by Dvorkovich who on September 28 has reduced the percentage of funds to "be withdrawn", talking about a sum ranging between 50% and 95%.

From the formal point of view, the government does not need the presidency to decide on Rosneftegaz dividends, but "consultations are ongoing" with the Putin administration, Dvorkovich said. Revealing that the battle is still open.

 

• russia
• putin
• duma
• budget
• oil
• state
• intervention