The Cost of Living
in Russia

At the very outset of the present economic turning-point it was already noted what influence the combination of a military budget, expensive credit, and the falling purchasing power of the population must inevitably exert upon the internal condition of the country. Subsequent events have confirmed this fully. Prices continue to rise, while the money incomes of the majority of the population fail to keep pace with the movement of the market. Official communications endeavour to soften the significance of this phenomenon, but trade, the family budget, and the structure of consumption speak a far plainer language.

When the present high cost of living is explained by nothing more than rising production costs or "external pressure," the essential side of the question is thereby concealed. In reality, what we have before us is the inevitable result of an order in which the state, finance capital, and the grande bourgeoisie daily redistribute surplus labour to their own advantage. In order that the reader may form some impression of the movement of prices for basic necessities, we present the following summary of average retail prices according to official statistics for the end of April 2026.

Even if individual figures vary by region, the general direction admits of no doubt: everyday necessities are becoming more expensive faster than official bulletins would have us believe. Meanwhile the movement of household incomes has a different character. Nominal wages have increased, but the quantity of goods that a working family can purchase has diminished. The price of life has risen faster than the price of labour.

It follows: the worker receives more roubles, but less bread, milk, meat, and warmth. The real consumption of the working class is falling, while the costs of reproducing the labour force are rising. Tax, interest, and commercial profit are growing faster than the income of labour.

As regards the money market, the high cost of credit continues to strangle trade and production. The Central Bank, despite a recent reduction, maintains its rate at levels that make borrowing unaffordable for any enterprise that lives not by state contracts but by ordinary commercial turnover.

Large capital bears the burden of expensive money more easily, since it possesses reserves of funds, access to preferential terms, and the ability to pass its costs on through the price of goods. The small proprietor, the craftsman, the carrier, the farmer, and the shopkeeper are compelled either to borrow on harsh terms or to curtail their operations. Expensive credit thus serves as an instrument for the further displacement of the weak by the strong. The concentration of capital accelerates.

The Military Budget and Redistribution

Particular attention is due to the distribution of the gains from the present high cost of living and the military budget. Russia has approved record military expenditure for 2026 — the highest since the Soviet era. Nearly 30% of the budget (12.93 trillion roubles) is directed immediately to the army, the procurement of weapons, and the conduct of war. A further 3.91 trillion roubles has been allocated to "national security" — the Ministry of Internal Affairs, the National Guard, and the security services. Together, spending on the army and the security bloc will amount to 16.84 trillion roubles, or 38% of the budget. By comparison, in 2021 this figure barely reached 24%. Billions of roubles that might have gone to housing, medicine, roads, schools, and cheaper credit are instead going to guns, metal, fuel, logistics, and replenishing casualties.

The share of social expenditure in the Russian budget has fallen from a pre-war 38% to 25% in 2026 — the lowest figure of the last two decades. Spending on economic support has dropped from 17.6% to 10.9%. The tax burden is growing: VAT has been raised to 22% and new levies are being introduced for businesses and citizens alike. In practice, Russia's working population is compelled to pay for the war out of its own pocket — through inflation, taxation, and the rolling back of social services.

To this is added the manner of life of the upper stratum of society. Where some count their pennies at the till, others maintain yachts, palaces, gated compounds, private security, expensive imports, and multi-layered transactions through intermediaries. Big capital — from the raw-material trusts to the industrial magnates — does not live by the price of the worker's grocery basket. According to the latest data, the share of Russian citizens with a monthly income above 100,000 roubles has reached a record 16.7%, an increase of 5.3 percentage points. Real disposable incomes have grown on average by 7.3%. Yet these statistics conceal a monstrous stratification: while the upper strata multiply their wealth, the lower strata are losing the ability to buy bread and milk. Some command flows of value; others pay for them with their labour and a declining standard of living.

The commercial community is increasingly noting the sluggishness of turnover. The consumer is shifting to cheaper grades of goods, smaller packaging, instalment plans, and the abandonment of major purchases. Sales are sustained by discounts, promotions, and the clearance of old stock. The shop is outwardly full, but the consumer's basket is growing lighter. Large retail chains increase their markups, banks receive high interest income, the treasury enlarges its collections from more expensive goods — while working families, pensioners, and small businesses bear the main burden.

"A Petro-State": The Illusion of Abundance

Here we arrive at the principal objection that inevitably arises among the defenders of the existing order: "But," they will say, "oil is becoming more expensive the world over — Russia is a petro-state; surely this ought to bring us relief? Surely high hydrocarbon prices fill the treasury, allow taxes to be held down, and moderate the high cost of living?" This question seems persuasive only at the most superficial glance. Class analysis reveals here a whole knot of contradictions which, for the working person, transforms "oil abundance" into a new form of dispossession.

First of all, the price that Russia actually receives for its oil is always, and significantly, below what is quoted on world exchanges. This is not a chance technical detail but a class-political given. While the western grades Brent or WTI reach peaks of $110–125 per barrel, our export grade Urals — after all discounts, compulsory price cuts, the costs of the "shadow fleet," and the fees of forced intermediaries — barely manages to reach $70–80. Furthermore, the buyers — India, China, Turkey — exploit their monopsonistic position and extract the maximum concessions for themselves. The seller is compelled to agree, since there are no alternatives. Thus the very order of sanctions and isolation converts national wealth into a bargaining counter, the proceeds of which settle in the pockets of foreign middlemen and shadow logisticians rather than in the state treasury.

But even if the oil revenue formally increases, it does not reach the worker or the pensioner. In Russia there operates a fiscal rule that is nothing other than a mechanism of class appropriation. As soon as the price of oil exceeds the level built into the budget (in recent years approximately $59–60 per barrel), all so-called "windfall revenues" are not directed to reducing taxes, are not allocated to building hospitals and schools, and do not compensate working people for their loss of purchasing power. They flow into the National Wealth Fund — a state piggy-bank accumulated for a rainy day. And under conditions of war, that rainy day has already arrived: money from the NWF is immediately withdrawn again to plug the holes in the military budget. The circulation of windfall revenues closes within the state-monopoly machine, never reaching the pocket of the hired worker.

Moreover, a high oil price triggers the mechanism of "Dutch disease" — a process long described by political economy — whereby commodity abundance kills manufacturing industry and agriculture. How does it work? The enormous foreign-currency revenues from oil exports strengthen the rouble. A strong rouble makes Russian goods — machine tools, clothing, furniture, processed products, even grain — expensive and uncompetitive both in foreign markets and at home. Factories close; workers are pushed either into the military-industrial complex or directly into the trenches. Domestic production is displaced by imports which, with a strong rouble, seem "advantageous," but are paid for with the same petro-dollar. The economy consequently becomes a pipe: oil leaves as an export and on the proceeds finished goods are purchased that could have been produced domestically. The working person is left with nothing: his factory is closed, and the imported refrigerator that can now be bought "more cheaply" is still unbearably expensive owing to the swollen network of intermediaries, markups, and logistics costs. The industrial proletariat is transformed into the lumpen-proletariat, living on casual earnings or going to war.

Finally, the sharpest point: even under the most favourable scenario of high oil prices, the Russian budget remains in deficit. For the first quarter of 2026, the deficit amounted to 4.6 trillion roubles — more than had been planned for the entire year (3.8 trillion). The reasons: at the start of the year our oil was cheap, several major refineries were put out of action as a result of attacks, and export volumes fell in physical terms. Even if one posits the fantastic scenario in which Urals holds at $80 for the rest of the year, this would yield an additional 1.5–3 trillion roubles. But this would merely reduce the deficit to 1.5–1.6 trillion, not close it. There will be no balanced budget. All new revenues will go not to reducing taxes for the population, not to indexing the pensions and salaries of public-sector workers, but to plugging the holes left by military expenditure. Such is the essence of the militarised state: any additional income is immediately consumed through guns.

And finally, what the apologists of "oil abundance" prefer to pass over in silence. The present surge in prices in the Middle East is a temporary and conjunctural phenomenon. It rests on the threat of a blockade of the Strait of Hormuz. But as soon as that threat passes — and the great powers will make every effort to reopen the strait and save the world economy from collapse — prices will fall back to $60–70. Russia will be left with a leaking budget that the high conjuncture has only temporarily patched over. The physical losses of production, transport, and refining capacity will not disappear. The tankers of the "shadow fleet" are becoming fewer under the blows of European inspections, insurance premiums are rising, and even cheap Urals is becoming difficult to deliver to the buyer.

The Billionaires of War: Forbes, April 2026

Thus the claim that "we are a petro-state, therefore things must improve for us" breaks down against class reality. Yet it would be an incomplete analysis to dwell only on macroeconomic indicators. The class character of the order is laid bare with full clarity when we turn to how real incomes are distributed within the ruling class, and who precisely becomes the beneficiary of war and high prices.

Let us take the latest data from Forbes magazine for April 2026. The combined wealth of Russia's dollar billionaires has reached a record $696.5 billion. A year ago this figure stood at $625.5 billion. In a single year — an increase of 11%, or $71 billion. The number of the super-rich has grown from 146 to 155 individuals. This is not "recovery from sanctions," as the apologists try to present it. It is the direct consequence of the war economy, the growth of state expenditure, and the redistribution of national income in favour of those who own the means of production and have access to administrative resources.

Let us consider specific figures — names long familiar to the reader from the headlines of the news bulletins.

Alexei Mordashov, owner of Severstal and Nordgold, has not merely topped the Forbes list — he has broken the record for the entire history of the Russian ranking. His fortune is estimated at $37 billion, having added $8.4 billion in a single year. Why? An 80% rise in gold prices and the militarisation of the economy. His metal goes into armour, shells, military hardware. Every shell fired is an increment to Mordashov's capital.

Alisher Usmanov — the already-mentioned shareholder of Metalloinvest and the USM holding. Since the start of 2025, his fortune has grown by $6 billion, reaching $19.3 billion by January 2026, and by some estimates $14.5–16.4 billion. Whence such a leap? The sanctions did not work. His assets have been transferred to Russian jurisdiction, and his commodity exports have been reoriented to eastern markets at prices that continue to generate windfall profits. While the worker economises on bread, Usmanov buys up the factories of departing competitors and builds international business centres abroad.

Oleg Deripaska. As recently as 2022, his fortune had crashed to $1.7 billion under the blows of sanctions. Today he stands in 26th place in the ranking with $7.6 billion — a gain of $3.5 billion in the past year alone. What changed? Military orders have loaded his factories — GAZ, aluminium plants, the enterprises of Basic Element — with work. The state pays. Deripaska has risen from 37th place to 26th, overtaking dozens of competitors.

But it is not only the old names of the oligarchic list that are multiplying their capital. Appearing in the Forbes ranking for the first time in 2026 is Alexander Tkachev — the former governor of Krasnodar Krai, now owner of Agrokomplex. His fortune is estimated in the billions. How did a former high-ranking official become a billionaire under conditions of war and high prices? The answer lies on the surface: administrative connections, access to land, preferential credits, state procurement for the army, and food security. The class that owns the state converts political power into economic power directly before our eyes.

Or take the Patrushev family. Although direct figures on their wealth do not appear in the open rankings — they are not shareholders of public companies but senior state managers — the mechanism of enrichment is plain. Dmitry Patrushev, Minister of Agriculture (and formerly Chairman of the Board of Rosselhozbank), oversees the distribution of billion-rouble subsidies, preferential credits, and land allotments. His father, Nikolai Patrushev, Secretary of the Security Council, influences the allocation of defence contracts, the oversight of strategic enterprises, and personnel appointments within the security bloc. Access to decision-making under conditions in which the state annually spends 16.84 trillion roubles on military and security needs automatically means access to enormous flows of value — through contractors, intermediaries, "preferred" suppliers, and family members placed in key posts in state corporations.

The Direct Connection

The reader will ask: what does this have to do with the high price of my bread and milk? The connection is direct and inexorable. Every additional billion earned by Mordashov, Usmanov, Deripaska, Tkachev, and those whose names remain beyond the margins of the rankings, is a billion extracted from the pocket of the working person. Every new yacht keel, every gated compound, every private jet is bread, meat, milk that never reached the worker's table. War and the militarisation of the budget create colossal domestic demand. The oligarchs' enterprises become the principal links in the supply chains for the needs of the army. The state is compelled to indulge their appetites — otherwise there is nothing with which to wage war. Banks fattened on war loans, the textile barons whose manufactories sew uniforms for the million-strong army, the metallurgical enterprises supplying weapons and ammunition — all of them receive windfall profits from the state budget, which is filled by taxes and inflation, which is to say from the pocket of that same worker who today stands at the till and counts whether he has enough for a loaf of bread.

And here is the bitterest irony of the present order: while kitchens buzz with talk of high prices and shortages, in government offices and the offices of oligarchs the discussion is of where to invest the next billion of surplus profit. While the worker curtails his consumption, the oligarch expands his production — military, extractive, construction. While the pensioner counts his kopecks, the official gains access to a new tender. The high cost of living and war are not a calamity that has fallen equally upon all. They are a redistributive mechanism that pumps value upward, from the propertyless to the propertied, from labour to capital.

For as long as this order persists — war, the militarisation of the budget, expensive credit, the tax yoke, commodity dependence, and the monstrous inequality whereby 155 families own $696 billion while millions of workers cannot afford milk — the high cost of living will return again and again, changing its forms while preserving its former content: the daily levying of the mass of the population for the benefit of war, luxury, and the capital that owns money, trade, and the means of production. Guns and yachts are paid for with the bread and milk that the worker is denied. Oil abundance becomes not a source of nourishment but a new mechanism for extracting surplus labour. Such is the inexorable logic of the class that stands in power.