"On the brink of emergency": Arkhangelsk seeks Moscow bailout to avoid winter crisis

Without additional funding from Moscow, the region could face "a regional-scale state of emergency," the Arkhangelsk Regional Assembly said, with the greatest impact expected in remote settlements across the High North.

At the heart of the crisis is a severe funding shortfall for subsidies to utility providers. The regional budget has allocated just 5,63 billion roubles (€63 million) for the purpose—only about one-third of the amount actually required, according to the lawmakers themselves.

These subsidies are essential because they compensate heating and utility companies for the gap between the actual cost of producing heat and the state-regulated tariffs charged to households.

"The lack of funding is preventing utility providers from making timely payments for wages, taxes, fuel supplies and electricity, while repair and investment programmes are being disrupted," said Alexander Dyatlov, a member of the presidium of the United Russia faction in the regional parliament.

At the same time, the region's annual Northern Delivery programme ("Severny Zavoz")—the large-scale operation that supplies fuel and essential goods to remote settlements before winter—is falling behind schedule. Officials say they cannot currently guarantee the delivery of the required 21,000 tonnes of coal and 12,000 tonnes of diesel fuel to isolated districts of Arkhangelsk region. If sea ice forms before the fuel arrives, local boiler houses could be forced to shut down.

Particularly striking is the explanation offered by the regional authorities for the growing budget deficit. In an unusually candid statement, the press service of the Arkhangelsk Regional Assembly acknowledged that "regional budget revenues continue to be adversely affected by negative economic factors, including those related to sanctions." In particular, projected corporate profit tax revenues for 2026 have fallen below the levels recorded two years ago.

The admission marks a sharp departure from previous messaging by regional officials. Until recently, Governor Aleksandr Tsybulsky repeatedly argued that the regional economy had "successfully overcome the consequences of sanctions" and that Western restrictions had created new opportunities for import substitution and for redirecting the timber industry towards alternative export markets.

The latest appeal suggests a very different reality. The authorities now acknowledge that shrinking revenues have depleted the regional budget to the point where it can no longer finance basic heating subsidies without federal assistance.

Independent commentators in the region have responded with irony, noting that officials publicly acknowledging the economic damage caused by sanctions could, under today's political climate, themselves risk accusations of undermining the Kremlin's narrative.

Criticism has also been directed at the regional parliament, whose members approved the current budget despite earlier warnings. The financial problems were far from unforeseen. When the three-year budget was adopted in late 2024, the regional Audit Chamber warned that the deficit—then projected at 8,5 billion roubles (€95 million)—was expanding rapidly, that public debt was approaching critical levels, and that subsidies to utility companies were being cut.

The auditors also warned of the risk that the government would accumulate overdue debts to utility providers.

Despite those warnings, lawmakers approved what critics described as an unbalanced budget. Now, with both the consequences of that decision and the impact of sanctions on the region's major taxpayers becoming increasingly apparent, the regional authorities are seeking to share responsibility for a potential winter heating crisis with the federal government.