BLBG:Russia May Cut October Oil Duty 7.4% on Revised Rate, Price
Russia may reduce its export duty on most crude shipments by 7.4 percent on Oct. 1, after Prime Minister Vladimir Putin urged a tax measure to spur production and oil prices fell.
The standard duty may decline to $411.40 a metric ton ($56.12 a barrel), according to Bloomberg calculations based on Finance Ministry data, using a tax rate of 60 percent, down from the 65 percent applied previously. The duty for September was set at $444.10 a ton.
The discounted rate on some Eastern Siberian and Caspian Sea oil may be reduce to $204.50 from $205.10 this month.
Russia bases its export duties on the average Urals price from the 15th day of one month to the 14th day of the next. Urals, Russia’s benchmark export blend, averaged $112.26 during the most recent monitoring period, Alexander Sakovich, a Finance Ministry adviser, said by phone today.
Putin must sign off on the levies for them to come into effect. The Finance Ministry is calculating the duties for October based on the so-called 60-66 formula, Sakovich said. The government will probably set the 60 percent rate “by hand” each month, he said in August. Putin last month signed an order unifying the refined product duty at 66 percent of the crude levy.
The product duty may be set at $271.50 a ton next month. That would cut the tax on middle distillates such as diesel by 8.7 percent, while raising the rate for heavy products like fuel oil by 31 percent.
A special gasoline tax that Putin imposed starting May 1 to fight domestic shortages may fall to $370.20 a ton, Sakovich said. That is 90 percent of the crude duty.
To contact the reporter on this story: Stephen Bierman in Moscow at sbierman1@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
