Argus pricing remains in calculation of oil price for MET, though on FOB basis - Deputy Finance Minister Sazanov

MOSCOW. Nov 7 (Interfax) - Argus pricing remains in the calculation of the oil price for determining the mineral extraction tax (MET), though on a free on board (FOB) basis, Deputy Finance Minister Alexei Sazanov said at a meeting of the State Duma budget committee.

Sazanov said that the government has envisaged the opportunity to amend the discount if the actual Urals discount to Brent is greater than in taxation, thus avoiding excess burden on the taxpayer.

"The discount we use to calculate oil prices is being reduced: from $20 to $15 in 2024 to $10 in 2025 and $6 in 2026," he said. "If the market situation changes, the Russian government can increase this discount to $20 per barrel," Sazanov said, commenting on the proposed legislative amendments.

"In addition, it is clarified that starting from January 1, 2024, the procedure for calculating prices for Russian oil will be adjusted, since the Argus quote for the north-western and southern ports of Europe is no longer being published, only the quote for Russian ports remains. So we are switching to a quote for Russian ports for oil which is, accordingly, increased by the cost of transportation to the ports of north-western and southern Europe, calculated in the manner prescribed by the Russian government, but not less than $2 per barrel," he said.

"Now [it is being proposed] that there will be three quotes, and to calculate them the highest of the three will be taken: Brent -$15, the Argus quote in Russian ports, increased for transportation to Europe, and a third quote, which will come into effect on January 1, 2025, when the methodology will be calculated - this is the St. Petersburg exchange," he said. Thus, two quotes will be used, Argus and Brent -$15, in 2024.