Energy Ministry proposing suspending tax control of prices in foreign trade deals for oil, petroleum products

MOSCOW. March 29 (Interfax) - The Energy Ministry is proposing suspension of tax control of prices in foreign trade transactions with oil and petroleum products to support fuel and energy complex companies, deputy director of the Energy Ministry's oil and gas complex department Roman Kabakov has said.

One of the main measures is "the suspension of tax control of prices in foreign trade transactions with oil and petroleum products, he said.

"It is important within the framework of transfer pricing control because we understand that the current situation, which is shown to us by global and Western price agencies, differs from the actual actual price situation - from the prices at which hydrocarbons are sold. Here it is important not to overdo it and not to increase the administrative burden on business," Kabakov said.

In addition, since oil production and refining are highly interconnected, maintaining stable oil refining and fuel production requires maintaining acceptable prices for raw materials, he said.

"To do that, we need to look more closely at the tax system in oil production, at how rent taxes, such as MET, are determined. In the current environment, when global prices are already detached from reality in terms of discounts at which our oil and oil products are traded, the question arises of changing the indicative level of oil prices, from which all taxes are calculated - MET, duties, EPT and a whole host of taxes from the tax code," the official said.

One of the measures to support oil production that is currently being discussed with the Finance Ministry and companies is support for fields in Western Siberia, which are in EPT Group 3. For example, an adjustment of the cost ceiling on which the MET tax base is determined is being considered, "to avoid the risk of rising production costs and not to increase the burden on business," Kabakov said.