Russia's FinMin says to stick to oil duty cuts plans in 2017

[MOSCOW] Russia's Finance Ministry will go ahead with plans to lower oil export duties next year if prices do not increase significantly, Deputy Finance Minister Ilya Trunin told reporters on Monday.

Russia had scrapped plans to cut the duty for this year due to lower prices of oil, the country's main exporting commodity. Oil producers had expressed concern that the government would increase the tax burden as it tries to make up the shortfall in state coffers.

The changes will reduce oil export duties while increasing a mineral extraction tax, allowing Russian refineries to reduce crude processing and increase sales abroad.

As a part of the change Russia's government should reduce a coefficient of the formula to 30 percent from the current 42 per cent, according to which oil companies are paying oil exports duty. The formula is linked to seaborne Urals crude oil prices.

"If the oil prices are at the current level it's not a problem (for budget revenues) to lower (the coefficient)," Mr Trunin said.

Oil and gas taxes contributed around 43 per cent of the total Russian budget.

Russian oil exports are seen rising by 3.5 per cent this year due to a decline in refining volumes.

REUTERS