Main page > Comments > Actual topics > Bargaining over minerals production tax and gas tariffs

Bargaining over minerals production tax and gas tariffs

The finance ministry and the economic development ministry have suggested new initiatives in their long-lasting dispute with Gazprom about the pace of growth in the gas production tax and gas tariffs on the Russian market. Elvira Nabiullina’s ministry submitted to the government proposals on increasing tariffs of natural monopolies in 2012 to 2014 stipulating a possibility of their rise at the pace above inflation. Previously Vladimir Putin personally demanded to limit such growth to the inflation level, although later he admitted he did not dare to fix this decision officially. The economic development ministry proposes to introduce a two-stage rise in gas tariffs – from January 1, 2012 the prices are to add 5%, from April 1 they are to advance by 9.5%. Total annual growth (December 2011 against December 2012) in gas prices will be 15%, but due to the two-phase increase scheme the average annual prices of Gazprom will step up by just 12.5%. This is below the 15% level agreed several months ago before Putin voiced his idea to limit growth in tariffs by the inflation rate.

The sanction to raise tariffs will mean compensation for growth in the gas production tax for Gazprom. Another way to reduce or offset the gas production tax advance is abolishing the tax-free scheme of gas exports to Turkey through Blue Stream. This variant is supported by Alexey Kudrin’s ministry. In this case the gas production tax for Gazprom will be set at 431 rubles in 2012. The gas giant may try to put these expenses (30% export duties) onto the consumer (Turkey) but objectively speaking there are few chances to do that. Moscow is currently trying to gain Ankara’s consent to lay South Stream pipes in Turkey’s exclusive economic zone in the Black Sea. So, Gazprom is likely to compensate advance in the gas production tax by raising prices for domestic consumers.

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