Ministry of Finance: Advisable to consider transition to Dubai Crude quotes for both taxes and damper

MOSCOW. July 13 (Interfax) - The Ministry of Finance is ready to consider switching to Dubai Crude (rather than Brent or Urals) for oil taxation only in combination with similar changes in the calculation of the fuel damper, Russian Deputy Finance Minister Alexei Sazanov told reporters.

"We have Rotterdam quotes [the price of Russian Urals oil on a CIF basis in the port of Rotterdam, calculated by Argus] which we use not only to calculate oil taxes, but also to calculate the damper, so if we say that we are switching to other quotes, we can't leave unrepresentative European quotes when calculating the damper, and refuse them when calculating oil," he said.

Therefore, the Finance Ministry raised the issue more broadly: if we refuse oil quotations, then it is necessary to switch to some new quotations in the damper, Sazanov said.

"Accordingly, we are now waiting for proposals from the Energy Ministry as to which quotes in the calculation of the damper to switch to. Because we need to systematically resolve the issue, we are ready to do so, but then for both the damper and oil tax calculation, we will move away from quotes from northwestern Europe and switch to some other quotes. We are ready to consider it," Sazanov added.

He also said that the Energy Ministry is proposing that the price of Dubai be used as a benchmark for oil, while there are no proposals yet for petroleum products.

Sazanov also explained the departments' refusal to consider the price of oil in the eastern port of Kozmino and along the Druzhba oil pipeline in the calculation of the indicator for oil taxes. "It's just that we consider only those directions that were previously taken into account in the calculation of Urals. If you remember, the northwestern ports and ports in the south were used. Accordingly, they simply applied the same methodology as in the calculation of Urals so that the rate base does not change," he said.