Finance Ministry: Russia may switch to its own index when calculating oil taxes from 2024
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The price agency Argus will no longer publish the quotation of Russian oil from January next year, so Russia may switch to a national OTC index when calculating taxes for the oil industry. This was announced by Deputy Finance Minister Alexei Sazanov in the State Duma.
“We are switching to the Russian OTC index increased by $4 per barrel, this reflects the cost of delivery. And also to the calculation [Urals] Brent minus $20 from September 1, 2023. From January 1, 2024, you are indeed right, the Urals CIF quote published by Argus will be gone, – leads his words TASS.
According to the agency, the State Duma Committee on Budget and Taxes approved this amendment to the Tax Code.
The fact that the Ministry of Finance is considering reducing the maximum discount to Brent from the current $25 to $20, earlier wrote “Vedomosti”. According to experts, if the fixed discount is reduced to $20 per 1 bbl. additional budgetary oil and gas revenues on an annualized basis may amount to about 500 billion rubles. (or about 30–40 billion rubles per month).
Earlier in June, Alexei Rybnikov, President of the St. Petersburg International Commodity Exchange (St. Petersburg International Mercantile Exchange) said that the exchange’s indicator of the export price of Russian oil, which can be used in tax calculations, could start working in the coming months. According to Rybnikov, the exchange invited “key oil companies”, the Ministry of Finance, the Ministry of Energy, the Ministry of Economic Development, the Federal Antimonopoly Service, the Federal Tax Service, the Federal Customs Service, as well as the Bank of Russia and researchers to the board.
Since 2013, the Ministry of Finance has been using quotes from the Argus pricing agency on the basis of CIF (“price, insurance, freight”) in the ports of Rotterdam (Netherlands) and Augusta (Italy) when calculating taxes. But since December 5, 2022, as part of anti-Russian sanctions, sea supplies of Russian oil to the EU countries have been limited. From October, Argus began to calculate the quotation on the basis of FOB (“loaded on board”).
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