Main page > Products > The fuel and energy complex of Russia - Series of analytical reports > Fiscal Policy on Oil and Gas Sector: Revised as Often as Wikipedia

Fiscal Policy on Oil and Gas Sector: Revised as Often as Wikipedia

Fiscal Policy on Oil and Gas Sector: Revised as Often as Wikipedia

The tax system in the oil and gas sector continues to undergo radical changes.

The beginning of 2019 saw the introduction of a new tax regime: additional income tax. That experiment was supposed to start migration of the oil industry to an innovative principle of taxation: on profit, not revenue. It seemed that a new main road was found. In the same year, however, the Finance Ministry launched an overt offensive against AIT.

The fear of loss of government revenue now is more powerful than the threat of causing oil production to collapse in the medium term because of a tax system that does not stimulate investment.

The Finance Ministry would strongly prefer to speed up the tax manoeuvre completion that earns the state budget additional money. Oil and gas companies respond to this with individual lobbying, attempting to wangle special treatment for their projects.

Thinking better of it, the Finance Ministry even tried to persuade the President to impose a moratorium on incentives. Nothing helped, however.

Two cases became real hits of 2019: the one with the Priobskoye field and the fight for Arctic incentives to projects of Rosneft and its satellites. And by the way, neither case has fully been closed: for instance, debate is still under way about how the loss of revenue because of the Priobskoye project will be compensated for. Meanwhile, the spread of AIT was viewed among other things as an opportunity to cancel privileged regimes, but now the matter is again open to question.

Besides, discussion of taxation on the refining segment continued the entire year: the Cabinet tries to get vertically integrated oil companies (VIOC) not to raise prices for motor fuel in the domestic market as a condition for the decision to be passed.

The report gives a detailed account of the following:

  • The oil and gas sector as the key donor to the Russian budget

    • Collection of taxes from oil and gas companies in the context of the acceleration of the tax manoeuvre
    • Change in their share in the government revenue and the Russian GDP
    • Tax payments by the biggest corporations: common aspects and differences
  • AIT: the first results of the experiment

    • The difference in how the Finance Ministry and VIOC evaluate its effects
    • The prospects of the new tax
  • The fight for new tax breaks

    • The activity of Rosneft in the fight for new special treatment
    • The future of Arctic incentives
  • Oil refining in the context of the tax manoeuvre completion

    • Analysis of the mechanism of negative excises and its adjustment in 2019
    • Change of the rules of the game for motor fuel producers
    • Options for compensating for lost revenue through growth in mineral resources extraction tax: financial implications for VIOC
    • “Damper” for jet fuel
  • Taxation on the gas industry

    • Winners and losers
    • The Finance Ministry’s refusal to equalise the tax conditions for Gazprom and independent producers
    • The matter of the price of gas in the domestic market raised again

Contents of the report:

Introduction 3
Chapter 1. Oil & Gas as Key Donor to Russian Budget. Tax Revenue from Sector 5
Chapter 2. Oil Refining in Context of Tax Manoeuvre Completion 17
2.1. First results of new taxation on oil refining 17
2.2. ‘Tweaking’ negative excise system 23
2.3. Damper for jet fuel 33
Chapter 3. ‘Clash of Titans’: Fight for New Tax Breaks/td> 36
3.1. Epic with incentives for Priobskoye field 38
3.2. New Arctic incentives 41
Chapter 4. Taxation on Gas Industry: Winners and Losers 47
Forecast for Future Developments 51
Date of release: December 31, 2019

If you are interested to obtain please contact » Elena Kim

Other issues:
Bookmark and Share

Analytical series “The Fuel and Energy Complex of Russia”:

Outlook for Russian LNG Industry
Russian Energy and West One Year after Ukraine Conflict Began: Are There Connections Still?
Green Agenda in Russia during Bitter Conflict with West
After February 2022 the agenda was radically rewritten. Western companies began leaving Russia en masse, economic relations with the West were drastically reduced, and the Russian economy began to be pushed violently from the global economic space, hemmed in by sweeping sanctions. All that was, to put it mildly, not the best background for talking about ESG. Especially because tasks of survival and stability under unprecedented pressure became the priority in the economy. In late 2022, however, attempts to reanimate the ESG agenda already became obvious. The message is put across insistently that it is important to Russia regardless of the foreign policy situation. While earlier the “green pivot” was seen as an opportunity to attract Western investors and their technological solutions to Russia, now Keynesian reliance on domestic manufacture is discussed.
Oil and Gas Sector Regulation in 2022 and Prospects for 2023
Gazprom at the Forefront of Economic and Political Battles with Europe
Gazprom is being actively thrown out of the market. Its annual supplies to Europe have shrunk from the previous 150 billion to 65 billion cubic metres of gas. European officials assure that they have already learnt how to live without Russian gas, so they will bring its purchases down to but nominal values in 2023. Their main hope is liquefied natural gas. Today the EU must make a crucial decision: whether it has passed the point of no return in gas business with Russia and whether it is certain that its economy will endure without supplies of Russian pipeline gas. Or, on the contrary, Europe will realise after all that the gas balance will not be achieved and the payment for so headlong a rush for LNG will be disproportionate. Assessment of the potential volume of LNG that will appear on the market before the end of the current decade will be the most important factor for making the decision.

All reports for: 2015 , 14 , 13 , 12 , 11 , 10 , 09 , 08 , 07

Rambler's Top100
About us | Products | Comments | Services | Books | Conferences | Our clients | Price list | Site map | Contacts
Consulting services, political risks assessment on the Fuel & Energy Industry, concern of pilitical and economic Elite within the Oil-and-Gas sector.
National Energy Security Fund © 2007