The Ministry of Finance may transform the customs duties expenses from August
Release Date: 2011-06-27
In August, Russia may move on to a new accounting system for calculating export duties for oil and oil products, equalizing the stakes for light and dark grade refinery products, said state secretary and deputy finance minister Sergei Shatalov to reporters on the sidelines of the Russian Economic and Financial Forum in France.
“We wanted to introduce this system in July however, obviously we were not able to do this. Whether we succeed in August will mainly depend on negotiations between companies and ministries on what will be compensated and what will not” – said Shatalov.
The new formula for calculating the export duties, the so called “60/66”, implies a reduction in the percentage take for the export duty on crude with a correction from 0.65 to 0.60 and at the same time bringing the export rates on petroleum products of light and dark varieties up to 60% of the fee for crude oil.
In addition, said Shatalov, the ministry of finance requires that oil prices remain above $95 a barrel, to set the rate of duty on light oil up to 90%.
Adjustment is in process, it just transformed with high oil prices into the “60-66-90” formula. The threshold value will pass, for example, at 95 dollars per barrel, in which the duty on light oil will be at a higher level," - said Shatalov.
According to him, introducing new formula will be profitable for certain companies and disadvantageous for others, but in case of 90% duties the budget will have enough resources to compensate those who lost profit.
“The fees which we are planning to introduce will reduce the burden on oil companies and increase it for the refineries. Hence, it is expected that more funds will be invested in oil exploration and production, oil prices in the domestic market will increase somewhat, the efficiency will increase as well, and oil refining will be less effective.
Automatically this will lead to unregistered refineries going under, which does not bother us, whereas bigger ones might suffer”- said the deputy minister. He explained that companies that are within the vertically integrated holdings, will accept the new fees without too much pain. At the same time, for companies that purchase crude oil on the domestic market, this will become more expensive, and their profitability will decline. RIA Novosti reports.
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