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Oil Export Duty
October 18, 2015 10:14


The Head of “Rosneft” Igor Sechin believes that the increase in the tax burden in the fuel and energy sector will lead to a decrease in oil production. He declared this at the forum “Russia Calling” held by “VTB Capital”, as “Interfax” reports.

The top manager noted that the situation with the investment programs in the sector was deteriorating after the decision to maintain the export duty on oil at the current level had been taken. “If this trend continues, over the next 3 years we will experience the risks of decrease of oil production by 25-30 million tons of oil per year” – Sechin concluded. This, in turn, will provoke “and adverse effect on budget”.

The Head of “Rosneft” noted that the oil industry received a negative cash flow in the first half of the year. This is why the stability of the current level of oil production is the result of investments of previous years. So Sechin insisted on maintaining investment in the oil and gas industry at the level of previous years. In turn, the Finance Minister Anton Siluanov objected to it and said that the state privileges and preferences should be given, first of all, to the non-oil sectors of the economy. “If we speak about preferences, these should be processing sphere, industry, but we do not need to worry about the oil sector, because the oil sector gets on well even during the crisis” - the Head of the Ministry of Finance thinks. He called the focus of the government only on the development of the oil industry, which has been observed in recent years, a “tactical error”.

The Head of the Ministry of Economic Development Aleksei Ulyukayev did not agree with his colleague and warned about the negative consequences of the introduction of additional tax burden in the oil industry. “The exercise on MET and export duty is killing the traditional deposits. In 2018 we will have a negative tax” - TASS quoted the words of Ulyukayev. In early October the government decided not to cut the export duty on oil in 2016. The discussion of the tax assessment of the oil industry was conducted against the backdrop of discussions of the budget for the next year.

On September 21 the Ministry of Finance proposed to apply the lowered the dollar rate (44 roubles) to the deduction on the mineral extraction tax (MET) and “skim the cream from the sector”. The Ministry noted that the decision would allow to increase the budget by 609 billion roubles in 2016.


Author: Anna Dorozhkina

Tags: Rosneft Russian oil    

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