Bloomberg News

Russia to Cut Oil-Export Duty 4.5% Tomorrow After Urals Declines

October 31, 2011

Oct. 31 (Bloomberg) -- Russia, the world’s biggest oil producer, will reduce its export duty on most crude shipments by 4.5 percent tomorrow after oil prices fell.

The standard duty will decline to $393 a metric ton ($53.62 a barrel), according to an order signed by Prime Minister Vladimir Putin and published today in Rossiyskaya Gazeta, the state newspaper. That compares with $411.40 a ton this month.

The discounted rate on some East Siberian and Caspian Sea oil will be cut to $190.70 from $204.50.

Russia bases the export duties on the average Urals price from the 15th day of one month to the 14th of the next. Urals, Russia’s benchmark export blend, declined to average $108.06 during the most recent monitoring period, Alexander Sakovich, a Finance Ministry adviser, said by phone on Oct. 17.

The duty for middle distillates and heavy products will drop to $259.30 a ton next month from $271.50 in October. A special gasoline tax that Putin imposed May 1 to curb domestic shortages will fall to $353.70 a ton, 90 percent of the crude duty.

The government introduced the so-called 60-66 formula for oil-export taxes on Oct. 1, applying a coefficient of 60 percent to calculate the crude duty, down from 65 percent previously, and unifying the duty on refined products at 66 percent of that levy. The 60 percent rate is subject to monthly approval.

Liquefied petroleum gases such as propane and butane will be taxed at $236.50 a ton in November, compared with $196.60 this month.

--Editors: Amanda Jordan, Todd White

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

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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