The SPIMEX indicator for the export price of oil will start working in 2023

The St. Petersburg International Mercantile Exchange (SPb-MTSB) expects that the indicator of the export price of Russian oil calculated by the exchange, which can be used in calculating taxes, will start working in the coming months, the president of the exchange, Alexei Rybnikov, told Vedomosti on the sidelines of the SPIEF- 2023. For this, the exchange creates a special expert council, he explained.

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. He added that within two weeks the exchange will receive the positions of companies and departments, and an expert council will be assembled within a month. “In a couple of months, our indicator of Russian export oil can start working,” Rybnikov is sure.

He explained that the indicator can be used to calculate the export duty on oil, the mineral extraction tax (MET), as well as the additional income tax (ATD). Now the calculation of the indicator is in test mode, the exchange provides data in a closed mode for testing and verification. “We will start publishing for public access later,” Rybnikov explained.

“We are already receiving feedback from companies and departments, because everyone is affected. Our indicator will be used for taxation purposes, which is important both for ministries and for companies that will pay these taxes,” says the President of SPIMEX.

Vedomosti sent inquiries to the departments listed by Rybnikov and the largest oil companies.

According to Rybnikov, the over-the-counter oil price indicator calculated by the exchange includes data on 96-98% of transactions for the sale of Russian oil abroad. Thus, the exchange is now technically ready for the indicator to be used for tax purposes. As an intermediate option, Rybnikov notes, Dubai quotes can be used to calculate taxes.

Under the law, all Russian companies that produce more than 1 million tons of oil per year are required to register transactions for its sale, including export transactions, on the stock exchange. In an interview with Vedomosti in April of this year, Rybnikov explained that SPIMEX monitors all export transactions in all directions of shipment outside of Russia “up to a specific consignment.” Thus, the exchange can calculate the average price of oil supplies for the previous month as a whole and in separate directions.

The Ministry of Finance is ready to use the SPIMEX oil price indicator to calculate the MET, AIT and export duty, but the final decision will be made by the government, Deputy Finance Minister Alexei Sazanov said on June 14.

The FAS supports the creation of an additional expert platform based on the SPIMEX, taking into account their experience and the methodology used for other price indices, a representative of the department told Vedomosti.

In a commentary by the press service of the Ministry of Energy to Vedomosti, it is indicated that the ministry supports the idea of ​​using the SPIMEX price indicator for tax purposes. But the algorithm for its use needs to be worked out in detail, it says there. Now the ministry uses data from the exchange on export oil prices as part of monitoring, the commentary explains.

The Central Bank also supported the creation of national indicators for Russian commodity resources, a representative of the regulator told Vedomosti. “Discussions at the expert level, in which representatives of the Bank of Russia will also take part within their competence, will help determine the main parameters of the calculation and make the index relevant for use,” he said.

The FCS representative redirected Vedomosti’s request to the Ministry of Energy and the Ministry of Economic Development.

Russian President Vladimir Putin instructed the government to clarify the price indicators for Russian oil by June 30, 2023 in order to tax oil workers, including to reduce the discount on the Russian grade Urals to the benchmark Brent. The FAS reported in April that it expects in 2023 to agree at the interdepartmental level on the methods for calculating all national price indices, including oil prices.

Gazprombank did a similar project. In March, he announced the creation of a unit with the functions of a price agency, which will form price indices for Russian exports. Vedomosti sent a request to the press service of the bank.

In 2022–2023 Several amendments to the Tax Code were adopted, which introduced into the formulas for calculating the MET, AIT, fuel damper (budgetary compensation to oil workers in the event of disparity in domestic and export prices for petroleum products) and the export duty, a discount in the price of Russian oil to the cost of Brent oil. The discount factor in the formulas has decreased from the maximum $34/bbl. in April to $28/bbl. in June, and from July it will be $25/bbl. But, according to Deputy Prime Minister Alexander Novak, already in April the real discount on Urals was $26-27/bbl.

The development of the Russian price index is necessary, says Ekaterina Krylova, managing expert of the PSB Analytics and Expertise Center. The Ministry of Finance does not have the opportunity to rely on the calculations of foreign price agencies Argus or Platts, since the data of these agencies may not be entirely correct, she explains. Therefore, the Ministry of Finance continues to look for a more adequate indicator of the average cost of Russian oil, Igor Yushkov, a leading analyst at the National Energy Security Fund, agrees. In his opinion, the model in which Russia itself calculates the average cost of its oil, and is not tied to the quotes of foreign companies, is correct.

Olesya Nikiforova, director of the tax and legal consulting department at Kept, notes that the new price indicator should balance the interests of the budget and taxpayers. It should also take into account the real situation in the oil market, including for fair taxation, she explains.