Operating Expenses

The breakdown of operating expenses excluding depreciation and amortisation for 2019, 2018 and 2017, RUB mln
Operating expense (costs) 2019 Share in the total expenses (costs), % 2018 Share in the total expenses (costs), % Absolute change Change, % 2017
Employee remuneration, insurance premiums and social expenses 172,248 29.8% 163,591 30.0% 8,657 5.3% 149,878
Electricity 46,360 8.0% 42,360 7.8% 4,000 9.4% 41,718
Materials 36,543 6.3% 33,297 6.1% 3,246 9.7% 33,851
Pipeline network maintenance and repair services 22,038 3.8% 20,057 3.7% 1,981 9.9% 17,790
Insurance expenses 6,175 1.1% 6,359 1.2% (184) (2.9%) 6,070
Taxes (income tax not included) 36,961 6.4% 36,843 6.7% 118 0.3% 28,494
Pension expenses 10,422 1.8% (9,367) (1.7%) 19,789 х 5,412
Cost of commercial oil export (including the export customs duty) 187,366 32.4% 199,847 36.6% (12,481) (6.2%) 141,156
Cost of sales of oil on the domestic market 11,306 2.0% 5,873 1.1% 5,433 92.5% 8,497
Cost of sales of petroleum products 8,259 1.4% 6,350 1.2% 1,909 30.1% 4,639
Cost of other sold goods for resale 7,597 1.3% 5,600 1.0% 1,997 35.7% 2,513
Other operating expenses 32,765 5.7% 35,273 6.3% (2,508) (7.1%) 36,044
Operating expenses, depreciation and amortisation exclusive 578,040 100.0% 546,083 100.0% 31,957 5.9% 476,062
Cost of oil sales for export (including the export customs duty) (187,366) (32.4%) (199,847) (36.6%) 12,481 (6.2%) (141,156)
Taxes (income tax not included) (36,961) (6.4%) (36,843) (6.7%) (118) 0.3% (28,494)
Operating expenses (excluding depreciation and amortisation, oil sales for export and taxes) 353,713 61.2% 309,393 56.7% 44,320 14.3% 306,412

An increase in the amount of operating expenses excluding depreciation and amortisation can be mainly explained by the following factors:

  • an increase in pension accruals;
  • inclusion of NCSP Group and NFOT costs in the Group’s operating expenses;
  • an increase in the cost of sales of oil and petroleum products on the domestic market;
  • an increase in the amount of remuneration costs, insurance premiums and social expenses.
operating expenses excluding depreciation and amortisation Adjusted for the inflation rate for 2019 and 2018, RUB mln
Operating expense (costs) 2019 Share in the total expenses (costs), %

Inflation rate (forecast for 2019 vs 2018), %

2018 (inflated to 2019) Share in the total expenses (costs), % Absolute change Change,%
Employee remuneration, insurance premiums and social expenses 172,248 29.8% 4.7% 171,280 29.4% 968 0.6%
Electricity 46,360 8.0% 7.5% 45,537 7.8% 823 1.8%
Materials 36,543 6.3% 5.4% 35,095 6.0% 1,448 4.1%
Pipeline network maintenance and repair services 22,038 3.8% 7.4% 21,541 3.7% 497 2.3%
Insurance expenses 6,175 1.1% 4.7% 6,658 1.1% (483) (7.3%)
Taxes (income tax not included) 36,961 6.4% 5.4% 38,833 6.7% (1,872) (4.8%)
Pension expenses 10,422 1.8% 4.7% (9,807) (1.7%) 20,229 х
Cost of commercial oil export (including the export customs duty) 187,366 32.4% 8.6% 217,034 37.3% (29,668) (13.7%)
Cost of sales of oil on the domestic market 11,306 2.0% 8.6% 6,378 1.1% 4,928 77.3%
Cost of sales of petroleum products 8,259 1.4% 0.1% 6,356 1.1% 1,903 29.9%
Cost of other sold goods for resale 7,597 1.3% 5.4% 5,902 1.0% 1,695 28.7%
Other operating expenses 32,765 5.7% 5.4% 37,178 6.5% (4,413) (11.9%)
Operating expenses, depreciation and amortisation exclusive 578,040 100.0% Х 581,985 100.0% (3,945) (0.7%)
Cost of oil sales for export (including the export customs duty) (187,366) (32.4%) 8.6% (217,034) (37.3%) 29,668 (13.7%)
Taxes (income tax not included) (36,961) (6.4%) 5.4% (38,833) (6.7%) 1,872 (4.8%)
Operating expenses (excluding depreciation and amortisation, oil sales for export and taxes) 353,713 61.2% Х 326,118 56.0% 27,595 8.5%