Main page > Comments > Actual topics > Plans to adjust export duties on oil and oil products

Plans to adjust export duties on oil and oil products

According to mass media reports, the energy ministry suggests introducing new taxation procedures in March 2011 stipulating reduction in the oil export duties and advance in export duties on oil products. On January 18 main parameters of the reform were approved at a meeting chaired by Deputy PM Igor Sechin. According to the proposed novelties, the export duties on crude are to be cut by about 7%, while duties on light and dark oil products will be made level at 66% of the crude duties. The current combined rate of duties on oil products is 55% of the crude duties (70.7% on light and 38.1% on dark oil products).

The suggested measures may theoretically promote growth in Russian crude exports and thus decrease the amount of missing budget revenues caused by the decline in the crude export duties (or even exceed it). Part of enterprises will have to think about investing in technical upgrade of their facilities, because the widespread exports of cheap low quality dark hydrocarbons will become less profitable. Subsidies to Belarusian refineries by the Russian side will also drop because Russian export duties will be also applied onto them within the framework of the Customs Union agreements.

Yet, there will be a risk of decline in Russia's total volume of processing (some estimations point to a 30m ton drop per year), which in the long-term perspective does not meet modernization priorities of the Russian economic development proclaimed on the highest political level. It is indicative that Rosneft has been recently reported to have refused a major refining project in Russia - building a large refinery at the end of the ESPO oil pipeline. This may gradually turn into a tendency. In this case we will again face the problem of small refineries operating in the shadow legal conditions or working even illegally but satisfying unpretentious demands amid surging domestic petrol prices, which is possible if the volume of refining reduces.

By Stanislav Mitrakhovich, NESF leading expert


Bookmark and Share

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

Gazprom on the background of external and internal challenges
Regulation of Oil and Gas Sector in 2019 and Prospects for 2020
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.
Ukrainian Gas Hub: Climax at Hand
The “zero hour” comes in less than a month: the contracts for gas transit through Ukraine and for supplying Russian gas to the country terminate at 10 am on 1 January. Meanwhile, Gazprom and Naftogaz are very far from looking for a mutually acceptable solution. The entire European gas business is watching intently the negotiations between Russia and Ukraine. Everyone is waiting for a new “gas war”: the January 2009 events proved to be a serious test both to European consumers and to Gazprom as a supplier. Is there still a chance of agreement? If there is not, will Gazprom cope with its obligations to deliver gas to Europe? Is Russia bluffing as it assures that the new infrastructure and gas in underground storage facilities will enable it to get by without Ukrainian transit even as soon as this winter? What will happen to Ukraine itself at the beginning of 2020?
Digitisation and Its Implications for Oil and Gas: Myths and Possible Reality

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

LiveInternet