Bloomberg News

Russia to Lower Oil Export Duty 6.4% in June on Urals Decline

May 25, 2012

Russia, the world’s biggest oil producer, will reduce its export duty on most crude shipments by 6.4 percent from June 1 after Urals prices dropped.

The standard duty will fall to $419.80 a metric ton, or $57.27 a barrel, from $448.60 a metric ton this month, according to an order signed by Prime Minister Dmitry Medvedev and published today on the government website. The discounted rate on some Eastern Siberian and Caspian Sea oil will drop to $210.80 a ton compared with $232.40.

Russia bases the export duties on the average Urals crude price from the 15th day of one month to the 14th of the next. Urals, Russia’s benchmark export blend, averaged $114.18 a barrel during the most recent period, Alexander Sakovich, a Finance Ministry adviser, said by phone on May 15. In the previous monitoring period, the crude price averaged $120.76, according to the ministry.

The government lowered the crude tax rate in October, applying a coefficient of 60 percent, down from 65 percent, and unifying the duty on most refined products at 66 percent of that. The duty for middle distillates and heavy products will fall to $277 a ton next month from $296 a ton in May.

A gasoline tax that Putin imposed in May 2011 to counter domestic shortages will fall to $377.80 a ton from $403.70 a ton this month. That is 90 percent of the crude duty. The government will raise the duty on liquefied petroleum gases such as butane and propane to $237.10 a ton from $196.60 a ton this month.

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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