by By Carl Mortished
Siberian oil is cheap to bring out of the ground but costly to export and sell.
Taxes are a major issue and not just because of the Kremlin’s habit of issuing massive claims for back taxes.
Most of the benefit of the recent high oil prices goes straight into the Russian Treasury as high marginal tax rates of 78 per cent kick in at relatively low oil prices of $25 per barrel.
In addition to corporation taxes, oil exporters are subject to excise duties, transport fees owed to Transneft, the pipeline company, and an export duty that is calculated monthly in relation to oil prices. In September the export duty reached a record level of $200 per tonne.
“It’s arguable whether the taxes are excessive,” reckons Alex Brooks, analyst at UBS. “It is by no means clear that it is in Russia’s interest to encourage producers to pump a lot more oil and bring down the price.”
Source: The Times
Siberian oil is cheap to bring out of the ground but costly to export and sell.
Taxes are a major issue and not just because of the Kremlin’s habit of issuing massive claims for back taxes.
Most of the benefit of the recent high oil prices goes straight into the Russian Treasury as high marginal tax rates of 78 per cent kick in at relatively low oil prices of $25 per barrel.
In addition to corporation taxes, oil exporters are subject to excise duties, transport fees owed to Transneft, the pipeline company, and an export duty that is calculated monthly in relation to oil prices. In September the export duty reached a record level of $200 per tonne.
“It’s arguable whether the taxes are excessive,” reckons Alex Brooks, analyst at UBS. “It is by no means clear that it is in Russia’s interest to encourage producers to pump a lot more oil and bring down the price.”
Source: The Times
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