18 Sep 2018 17:49

Kozak: negative oil excise redistributes revenue from production to refining, financed by sector itself

GORKI. Sept 18 (Interfax) - The negative excise tax on oil and the damping component in essence redistributes earnings in the oil and gas industry from production to refining, with the sector itself providing the financing, Deputy Prime Minister Dmitry Kozak told reporters, adding that the financing situation is the same in 2018 as it is in subsequent years.

Although the negative excise tax on oil and damping component are scheduled to enter force in 2019, an earlier introduction of the mechanism is currently being discussed. The Finance Ministry opposes the idea, arguing that there are no budget sources for financing the negative excise in 2018.

"There are sources [for financing earlier introduction of the negative excise and damping component]. We are receiving additional income; the state receives two-thirds of the revenue from higher oil prices and not companies. We have a source: this is oil and gas revenue, which is not connected with Russian Federation spending commitments. Just as they exist in 2019, they exist in 2018," he said.

"This involves additional oil and gas revenue being redistributed via the budget system from production to refining, in order to fulfill the social task and hold down retail prices for motor fuel. This is simple arithmetic," he said.

"I even propose creating a formula so that it doesn't enter into the budget, but is akin to social assistance for consumers of diesel fuel and gasoline, and send the negative oil excise tax there," Kozak said.

The issue of introducing the mechanism before 2019 will be examined in mid-October, he said.

"We have reached agreement with the oil companies to hold a meeting in the middle of October to look at what the situation on the global market is, what the ruble exchange rate situation is," he said.