Russia’s tax manoeuvre will result in higher fuel prices in Belarus
On October 21st, Russia’s State Duma approved amendments to the Russian Tax Code in the first reading. If fully approved, the new amendments will change the way the oil industry is taxed in Russia.
The tax on resources extraction will increase and duties on some oil products will reduce, which will lead to higher costs of oil supplied to Belarus and revision of excise duties on fuel. Fuel prices in Belarus might rise due to the expected rise in fuel prices in Russia. Belarus might also increase the volume of re-export schemes for Russian oil products. Russia may limit the volume of oil supply to Belarus in order to limit Russian budget losses.
President Lukashenka has met with the head of Chechnya Ramzan Kadyrov, who visited Minsk and the Minsk Automobile Plant. Minsk has always sought to have independent links with Russian regional elites, partially, to compensate for the Kremlin's diminishing interest in Belarus. In recent years, Belarus’ contacts with the Russian regions have been extremely intense. However, with some leaders of Russian regions, primarily heads of large republics, communication was more difficult to build. As many analysts in Minsk suggested, Minsk could regard contacts between President Lukashenka and the head of Chechnya as an additional communication channel for relieving tension in relations with the Kremlin. However, most likely, a trusting relationship with Kadyrov is a value for Minsk as such, provided Kadyrov’s broad business and political interests, and a high degree of autonomy for the Chechen leader from the Kremlin.