The Russian government will calculate the amount of compensation payable to oil refineries to offset the rising cost of domestic crude under its “tax manoeuvre” based in part on price assessments published by global commodity price reporting agency Argus.
The government’s tax manoeuvre, which took effect on 1 January, will see the gradual withdrawal of crude and product export duty by 2024, alongside rising mineral extraction tax on domestic production, which is expected to result in tighter domestic crude supply and higher costs for refiners. To offset the impact of these rising costs, the government has introduced a “negative excise tax”, which will provide for compensation to be paid to refiners that meet certain criteria.
The level of this compensation is intended to reflect the difference in prices for gasoline and diesel between the Russian and European markets. The calculation will be made using a formula based on price assessments for gasoline with an octane number of 91 and French diesel, as well as freight rates for tankers of 30,000 deadweight tonnes for the transportation of light oil products and the cost of transshipment of oil products at Russian Baltic ports. This information is published in the Argus European Products, Argus Freight and Argus Nefte Transport reports.
The Russian government already uses Argus price assessments to calculate export duty on crude and oil products, the mineral extraction tax base rate and the mineral extraction tax rate for new Russian offshore oil, gas and condensate fields.
About Argus Media
Argus is an independent media organisation with almost 950 staff. It is headquartered in London and has 21 offices in the world’s principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets, and offers bespoke consulting services and industry-leading conferences.
Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.
Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders and global growth equity firm General Atlantic.
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