Bloomberg News

Russia May Cut Oil Export Tax 4.6% Next Month After Urals Falls

October 13, 2011

Oct. 13 (Bloomberg) -- Russia, the world’s biggest oil producer, may reduce its export duty on most crude shipments by as much as 4.6 percent on Nov. 1 after oil prices fell.

The standard duty will probably decline to within a range of $392.40 and $393.60 a metric ton ($53.53-$53.70 a barrel), according to Bloomberg calculations based on Finance Ministry data. That compares with $411.40 a ton in October.

The discounted rate on some Eastern Siberian and Caspian Sea oil may be set within a range of $190.30 to $191.10 a ton compared with $204.50 this month.

Russia bases the 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, may average $107.93 to $108.20 a barrel during this monitoring period, Alexander Sakovich, a Finance Ministry adviser, said by phone today.

Prime Minister Vladimir Putin must sign off on the levies for them to come into effect. The Finance Ministry is estimating November duties using the so-called 60-66 formula, Sakovich said. The measure applies a coefficient of 60 percent to calculate the crude duty, down from 65 percent previously, and unifies the duty on refined products at 66 percent of that levy.

The duty for middle distillates and heavy products may be decreased to within a range of $259 to $259.70 a ton next month, down from $271.50 in October.

A special gasoline tax that Putin imposed starting May 1 to fight domestic shortages may fall to within a range of $353.10 to $354.20 a ton, Sakovich said. That is 90 percent of the crude duty.

--Editors: Torrey Clark, Alex Devine

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


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