Extra oil supplies for Belarus as compensation for tax manoeuvre in Russian refining

April 22, 2016 19:18

Belarus and Russia have agreed oil supply for 2016 at 24 million tons with simultaneous reduction of counter supply of gasoline from 1.8 mln tons to 1 mln tons. In 2016, due to the tax manoeuvre in Russian refining the severance tax on oil will increase and export duties on oil and light petroleum products will reduce. As a result, the price of crude oil supplied to Belarus will go up, tolling supply of oil to Belarusian refineries from Russian companies will decline, export duties that remain in the Belarusian budget will decrease, and Belarus will have to reduce the excise tax on fuel in order to preserve domestic petroleum prices. Higher volume of oil supplies to Belarus is meant to somewhat compensate for the expected decline in profitability of Belarusian refineries. Counter supply commitments are not observed and do not have a decisive influence on oil supplies to Belarus.