Russia's oil refining sector to receive additional support measures for modernizing plants in 2026
MOSCOW. Jan 12 (Interfax) - The Russian oil refining sector will receive additional support measures to continue modernizing plants from the beginning of 2026, with the corresponding changes to legislation signed by President Vladimir Putin in late November 2025.
They provide for the possibility of concluding new investment agreements on modernizing oil refineries with the payment of an investment premium to the reverse excise tax on oil (an increasing coefficient of 1.3 in the reverse excise formula). These same changes provide relaxations for existing modernization agreements for Far Eastern refineries.
In addition, in 2026, reverse excise tax payments are increased for companies that do not manage to complete refinery modernization under investment agreements with the Energy Ministry, which involve ensuring production of Class 5 gasoline at a level of at least 10% of the processed oil level.
The reverse excise tax on oil was introduced in 2018, giving companies an incentive to continue modernizing oil refining facilities, a process initiated back in 2011. There have been two types of agreements since 2019: modernization agreements and investment agreements.
The Energy Ministry entered into 11 agreements on modernizing oil refineries in 2019, two of which were later terminated. The agreements granted the right to a rebate of the crude oil excise given compliance with one of two conditions: production of Class 5 gasoline amounting to at least 10% of total refining volume or investment of at least 60 billion rubles in the period from July 1, 2014 to January 1, 2026.
In 2021, investment agreements were signed that granted the right to a 30% investment premium on the reverse excise (Kinv), less a regional coefficient (Kreg), given investment of a certain amount in refinery modernization.
New investment agreements on modernization would be signed from January 1 to September 30, 2026. The investment premium under the new agreements would be paid starting the first date of the quarter in which the agreement is signed but not before the first date of the month in which the investor's accumulated expenditures reach 3 billion rubles. Payment of the premium would end when the amount of all its payments for previous periods exceeds the amount of expenditures actually paid by the taxpayer, taking into account advances, since January 1, 2025, but no later than 2036.
These amendments also propose to ease existing agreements on the modernization of refineries in the Far East Federal District. Such projects will now not stop receiving the investment premium if it exceeds the amount of investments made. Under current law, an oil refinery loses the premium in 2025-2028 (or 2026-2028) if its expenditures are less than 50 billion rubles (30 billion rubles) multiplied by a coefficient that characterizes the company's share in financing the investment agreement (Dfin), or less than the sum of premiums for previous tax periods.
A refinery that has already signed an investment agreement on modernization with the Energy Ministry cannot enter into a new investment agreement, unless it has fulfilled an agreement that calls for bringing production of Class 5 gasoline up to at least 10% of total refining volume or investing at least 60 billion rubles in facilities put into operation in the period from July 2014 to January 1, 2026.
At the proposal of the Energy Ministry, reverse excise tax payments are increased in 2026 for companies that do not manage to complete modernization (with the condition of bringing gasoline production to 10% of processing). Under previously effective legislation, if a company did not manage to achieve the set goal, the reverse excise tax is not paid to it in full. In 2026 it is 66% of the excise, while in 2027 it is 33%. If modernization is completed, the reverse excise tax is paid in full. The innovations in 2026 should increase the coefficient used to calculate the reverse excise tax to 85%.
