Tax manoeuvres to close refineries: Ministry of Energy provides for consequences of reform for oil companies

A compromise version of the tax manoeuvre, proposed by the Governmnet, will make six major Russian refineries unprofitable. These are four plants of Rosneft, which opposes the manoeuvre, and the refineries of Russneft and Surgutneftegaz. Now the Ministry of Energy and the Ministry of Finance discuss the possibility of "targeted support" for the problem plants. According to experts, targeted measures are not necessary; the refineries will just stop their unprofitable facilities. However, a part of the small plants will have to close completely.

As the Kommersant has got to know, the Ministry of Energy has conducted an analysis of how the introduction of the tax manoeuvre will influence the Russian oil processing. The Ministry of Energy and the Ministry of Finance agreed this at the end of late June at the joint meeting with Rosneft, which feared that it may suffer most from increasing duties on black oil. The State-owned company’s problems were confirmed: according to the Ministry of Energy’s assessment, four of its plants will be unprofitable – the Komsomolsk, Ryazan, Saratov and Achinsk ones (the latter is currently stopped because of a fire, its partial launch is planned before the end of the year), sources that are close to the government told the Kommersant. The production of oil products will also be unprofitable at the Kirishi refinery of Surgutneftegaz and Orsk refinery of Russneft. The companies don’t comment on this, and the Energy Ministry and the Finance Ministry declined to comment on additionally.

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