Govt could continue to lower oil duty if 60/66 system effective - minister
ST.PETERSBURG. June 22 (Interfax) - The government could continue to lower oil duties if the 60/66 system proves effective, Deputy Russian Energy Minister Pavel Fyodorov told Interfax.
"If the 60/66 system proves effective as the result of monitoring at the end of the year, and if the budget receives more funds from growth in investment by companies in oil production, then the government may continue to lower duties," he said.
The 60/66 system, introduced in October last year, calls for reducing the marginal coefficient in the formula for calculating the export duty on oil from 0.65 to 0.6. At the same time, the government raised export duties on dark oil products from 47% to 66% of the duty on oil and on gasoline from 66% to 90%. The idea was to stimulate oil production at existing fields in West Siberia and encourage deeper oil refining.
But ministries said as early as Q1 2012 that the system was not producing the desired results. The Energy Ministry said there was no evidence that refining depth was increasing and the Finance Ministry said a federal budget shortfall of 55 billion rubles had emerged. The oil companies said downstream profits had fallen.
Plans were for ministries to hold a conference in the third quarter to address the continued use of the 60/66 scheme.
- The Russian government is not so far satisfied by the 60/66 tax system, Prime Minister Dmitry Medvedev said during a meeting on taxation for the oil and gas sector at the central office of LLC Gazprom Mezhregiongaz.
"This is so far not what we would have liked," he said.
The measure was intended to improve the way existing fields are developed and to stimulate the modernization of refineries, and has had some effect, he said.
