Russia's Energy Ministry has proposed cutting the maximum crude oil export duty from the current 65 percent to 55 percent to shift the tax burden from oil production to oil refining, a Russian business daily reported on Tuesday, citing a ministerial source.
The 10 percent cut in the maximum oil export duty will boost profits from crude exports and increase crude oil prices on the domestic market, which in turn will reduce profit margins on refining the product, Vedomosti said.
Analysts at Swiss bank UBS concluded in late 2008 that it was more profitable for Russia to export crude oil than petroleum products, as crude exports could yield higher revenues both for state coffers and oil companies, the paper said.
If the new system is introduced from 2012, budget revenues from the oil sector will amount to 43.32 trillion rubles over 10 years, even though they will fall by 68 billion rubles during the first year. Without this new system, Russia will fall short of 8.55 trillion rubles over the 10-year period, the paper sad, referring to the ministry's calculations.
Russia's current taxation and customs regime provides incentives for oil refining to the detriment of crude oil production, with export duties on petroleum products considerably lower than those on crude oil, the paper said.
MOSCOW, Oct 12 (RIA Novosti)