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“Proportional to a reduction in export duties”: Novak announced Russia's proposal for oil prices for Belarus

2020-02-22T13:00:18.738Z

Moscow suggested Minsk reduce premiums on oil prices by about $ 2 per tonne each year. As the head of the Ministry of Energy, Alexander Novak, explained, this mechanism is proportional to the reduction in the export duty on oil, which occurs as part of the implementation of the tax maneuver in Russia. The Belarusian side previously announced the readiness of the Russian Federation to compensate Minsk for the lost income. The Kremlin said that the dialogue on oil supplies to Belarus continues, but there is no talk of compensation.



The Russian side suggested that Belarus reduce premiums on oil prices by about $ 2 per ton each year. Such a reduction is proportional to the fall in export duties, said Russian Energy Minister Alexander Novak.

“An approach has been proposed that takes into account the reduction in export duties, namely, a reduction in premiums of approximately $ 2 per tonne each year, that is, in proportion to a reduction in export duties. This will partially offset the effect of the reduction in export duties, ”RIA Novosti quoted Novak as saying.

As the minister explained, the proposal of Russian companies to change the pricing formula was brought to the attention of Belarusian partners.

Shortly before Novak’s statement, President of Belarus Alexander Lukashenko stated that Moscow had allegedly expressed its readiness to compensate Minsk for the lost oil export revenues.

According to the Belarusian leader, Vladimir Putin proposed keeping financial conditions for oil supplies at the level of 2019 and reimbursing about $ 300 million in lost revenue due to a tax maneuver.

The Kremlin said that the dialogue on oil supplies is ongoing, but no discussion is being held on compensating Minsk's lost expenses. According to the press secretary of Russian President Dmitry Peskov, “each side makes its own calculations.”

“There is no talk about this yet. There are different, let's say, requesting positions of the parties, they are being implemented, ”Peskov explained, noting that the participants in the discussion are considering different options for“ finding mutually acceptable options ”.

Commenting on the course of the dialogue on oil supplies between Moscow and Minsk, Igor Yushkov, expert at the Financial University under the Government of Russia, leading analyst of the National Energy Security Fund, indicated that many parameters of this discussion are outside the information field.

In an interview with RT, the expert noted that negotiations did not mean the abolition of the tax maneuver: “The scheme proposed by the Ministry of Energy is positive for the budget, because it is assumed that the profitability of companies will decrease with oil supplies to Belarus, and not budget revenue. The proposed solution to the problem suggests that the Russian budget will not pay for this. ”

He expressed the opinion that after the proposal of the Russian side, some questions still remain, in particular regarding the possible adjustment of the size of discounts.

“It seems to me that the issue with some kind of amicable settlement has not yet been finally resolved, but it is clear that Belarus, for its part, has also proposed something,” the expert believes.

Russian tax maneuver

The consequences of the Russian tax maneuver for Belarus are controversial in the dialogue between Moscow and Minsk on oil supplies. The Belarusian side is counting on compensation and considers the issue of oil price open.

The tax maneuver in the Russian oil industry is to gradually reduce the export duty on oil from 30% to zero between 2019 and 2024. At the same time, taxes on the extraction of minerals will increase.

Measures have been developed to prevent rising fuel prices within Russia, including a mechanism for the reverse excise tax on oil supplied to Russian refineries. However, for Belarus, a system of protection against rising prices is not provided.

  • President of Belarus Alexander Lukashenko
  • Reuters
  • © Vasily Fedosenko

At the end of 2019, Lukashenko ordered to begin the search for alternative oil suppliers. In January, Minsk acquired 80 thousand tons of Norwegian oil, and at the end of that month it became known that Belarus was negotiating on the supply of raw materials with the United States and the UAE.

As Director of the Energy Development Fund Sergey Pikin explained, before Belarus earned on the difference between the price of oil purchased from Russia and products sold abroad made from this raw material.

“Belarus has always earned on this difference between the goods in the form of oil, delivered on the territory of Belarus and the difference that it could then export outside Belarus without paying the export duty. In fact, making money on export without export duty, producing oil products, ”said the expert in an interview with RT.

Source: russiart

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