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Russia may revoke tax maneuver if gasoline prices soar: lawmaker

http://www.chemnet.com   Dec 22,2014 Platts
Russia may revoke the so called tax maneuver, which from 2015 cuts oil export duties but increases the mineral extraction tax, if as a result gasoline prices soar, chairman of the lower house of parliament, the State Duma's, energy committee, Ivan Grachev, said Friday.

"If gasoline prices rise, there is a possibility," of the tax maneuver being revoked, Grachev told a press conference in Moscow, adding that a draft law to this effect has already been submitted in the State Duma.

Fears have been mounting among the oil industry in Russia that the lower export duty coupled with the higher mineral extraction tax will result in higher domestic crude prices which will lead to higher product prices.

The lower duty may also channel more products to export destinations, with a subsequent tightening of domestic availability.
Earlier Friday concerns were growing among domestic crude oil traders that crude prices in January will surge to unprecedented levels of around Rb17,000/mt ($283.30/mt).

"We have never seen such a price," said one trader.

Should the enforcement of the tax maneuver result in surging gasoline prices, to which the gasoline-oriented car fleet in Russia is particularly sensitive, once the Duma convenes after the holidays it can discuss revoking the tax maneuver, Grachev said.

He estimated that partly due to inflation, but mostly due to the tax changes, gasoline prices may rise another Rb12/liter in January from an average of Rb35/liter now.

According to Grachev, by reducing the export duty the tax maneuver will actually benefit export destinations rather than the Russian citizens.
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