Bloomberg News

Russia Plans to Raise Oil-Export Tax to Record Oct. 1

August 27, 2007

Russia, the world's largest energy producer, will raise its tax on crude-oil exports to a record on Oct. 1 after world fuel prices rose in July and August.

The tax will probably increase to between $248.50 and $250.60 a metric ton, Alexander Sakovich, deputy head of the Finance Ministry's customs department, said by telephone in Moscow today. The current duty is $223.90 a ton ($30.55 a barrel).

Russia revises its export taxes on crude and oil products every two months based on previous two-month average prices for Urals, the country's benchmark export blend.

The export taxes for oil products will also reach record levels in October and November, Sakovich said. Exports of light products such as gasoline will probably be taxed in the range of $179.70 to $181.3 a ton, while heavy products including fuel oil will be taxed at from $96.80 to $97.70, he said.

Russian oil companies divert crude to domestic refineries and storage when the tax rises. Crude exports through state pipeline monopoly OAO Transneft declined 6.9 percent in June to 4.25 million barrels a day in June from the previous month after the tax was raised to $200.60 a ton.

The average price for Urals in July and August will be from $71.21 to $71.67 if oil trades at $65 to $70 a barrel during the next four days, Sakovich said.

The previous record for crude export tax was $237.60 in October and November last year.

To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net.

To contact the editor responsible for this story: Daniel Tilles at dtilles@bloomberg.net.


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