The government agreed to adjust oil taxes

As it became known to Kommersant, the project on adjusting taxes for the oil industry is entering the home stretch – its parameters were approved in principle by the government this week. As Kommersant wrote, it is planned to cut damper payments for oil companies from September, as well as to reduce the maximum discount of Urals to Brent when calculating oil taxes to $20 per barrel. Thus, the maximum amount of the discount established by law will be close to its current values. In addition, it is planned to transfer tax benefits for depleted deposits for three years.

The government approved in principle the amendments to change oil taxes, sources familiar with the discussion told Kommersant, and confirmed the interlocutor of Kommersant in the government. In the near future, the draft should be approved by the commission on legislative activities of the government and submitted to the State Duma. The press service of the government and the Ministry of Finance did not answer Kommersant.

According to Kommersant’s interlocutors, the government generally agreed with most of the parameters proposed by the Ministry of Finance. The key change will be the reduction of the maximum discount of the price of Russian Urals oil in relation to Brent, which is used in calculating the MET, additional income tax (ATD) and export duty on oil.

Since July, according to the current law, this indicator has been set at $25 per barrel (in June it was $28 per barrel). Under the government-approved amendments, from September the maximum discount will be reduced to $20 per barrel, which will generally correspond to its current level. “Now, in fact, the discount is approaching the proposals of the Ministry of Finance. We look at this issue pragmatically,” Nikolai Shulginov, head of the Ministry of Energy, said on June 16 (TASS quote).

In addition, since September, the government decided to cut damper payments to refineries for the supply of gasoline and diesel fuel to the domestic market for a year. Simultaneously with the reduction of the severance tax (due to the adjustment of the Cabdt coefficient), the budget will be able to additionally save 30 billion rubles. per month.

Another measure will be the postponement of the start of benefits for depleted fields for three years. This can bring an additional 460 billion rubles to the budget. within three years (see Kommersant of June 13). Since 2021, depleted fields, which account for about 140 million tons of annual production, have lost MET benefits, but have received the right to switch to the UT regime and receive a tax deduction from 2024. Now the right to a tax deduction will be transferred.

On June 28, Deputy Finance Minister Alexei Sazanov noted in an interview with RIA Novosti that “in the resource sectors, including oil and gas, we are already approaching the ceiling of the potential for an increase in the tax burden.” “Its further increase may have a destructive effect on the industry: a reduction in investment may begin. This issue needs to be approached in a very balanced way,” the official said.

The Ministry of Finance decided to adjust taxes on the oil industry in the face of declining oil and gas revenues due to Western sanctions, as well as lower oil and gas prices on world markets. In the first five months of 2023, the Russian budget deficit exceeded the planned figures by 0.5 trillion rubles. In particular, to replenish revenues, the government made additional withdrawals from industry by initiating the adoption of a tax on excess profits (on June 28, the corresponding draft was adopted by the State Duma in the first reading), which should bring the budget up to 300 billion rubles.

The net effect for the budget from reducing the damper and reducing the NPDI rate (through the CABDT) in 2023 could amount to 140 billion rubles, Sergey Kondratyev from the Institute of Energy and Finance estimated. The effect of limiting the discount on Urals from September will be, in his opinion, “virtual”, since the discount is already at the level of $20-21 per barrel, “and this is fixing the status quo.” According to his estimates, the delay in granting incentives for depleted fields from 2024 will allow the budget to save 100-120 billion rubles. in year.

Dmitry Kozlov