Bloomberg News

Russia to Lower Crude Export Tax 4.5% in April After Urals Falls

March 28, 2013

Russia, the world’s biggest energy exporter, will reduce duties on most crude and oil product shipments overseas by 4.5 percent on April 1, down from a 10- month high, after a drop in benchmark Urals prices.

Standard export duty will decline to $401.50 a metric ton, or about $54.77 a barrel, from $420.60 a ton this month, according to an order published on a government website today. The March tariff was the highest since May 2012.

The government is reviewing its export duty structure to encourage producers to meet President Vladimir Putin’s goal of pumping more than 10 million barrels a day. Output was 10.45 million in February, close to a post-Soviet high, according to data from the Energy Ministry’s CDU-TEK unit. Oil and gas provide about half of Russia’s budget revenue.

The discounted rate on some eastern Siberian and Caspian Sea grades will drop to $197.10 a ton from $211.40 this month. The levy on extra-heavy crude, set at 10 percent of the standard duty, would be $40.10 in April.

Russia bases the export taxes on the average Urals blend price from the 15th day of one month to the 14th of the next. The grade averaged about $110.02 a barrel during the most recent period, Alexander Sakovich, a Finance Ministry adviser, said March 15. In the previous monitoring period, it was $114.38, according to the ministry.

Duty for middle distillates, such as diesel, and heavy products, such as fuel oil, will fall to $265 a ton from $277.60. A gasoline tax, set at 90 percent of crude since May 2011 to counter domestic shortages, will be reduced to $361.40 a ton in April from $378.60 this month.

The government will lower the duty on liquefied petroleum gases such as butane and propane to $70.50 a ton from $131.40.

To contact the reporters on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net; Marina Sysoyeva in Moscow at msysoyeva@bloomberg.net

To contact the editor responsible for this story: Raj Rajendran at rrajendran4@bloomberg.net


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