Russia:Tax manoeuvre not to help oil production

From next year, the tax manoeuvre in the oil industry will start: a sharp decline in export duties on crude oil for three years and the same sharp increase in MET. The manoeuvre will greatly reduce margins in oil refining due to the increase of domestic oil prices, but it is planned to bring additional revenue to the production.

But the effect of the manoeuvre was calculated by officials in July, when the average monthly price of oil was $108 per barrel. Now the price is more than a third below. And if it drops to $65 per barrel, the effect will be much worse, experts of the Moscow Oil and Gas Center EY calculated. And the manoeuvre makes the companies’ position worse in the first two years – in the current system the losses would be less, the center’s director Denis Borisov warns.