Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, gave a comment to Kommersant FM on the prices of Russian oil.
The tax payments for oil companies are formed based on the average cost of raw materials, which is announced by the Ministry of Finance. And for the last two months, quotes have remained below $50 per barrel. Because of this, in February, according to the forecasts of the Ministry, the budget could not receive 108 billion rubles of oil and gas revenues. This forced the authorities to adopt a law that should limit the discount on Urals compared to the benchmark Brent of $25 by the summer. At the same time, it is now $33.
According to Sergey Kondratiev, this measure assumes a more careful approach that will not lead to losses for some exporters:
"There is a problem. But we see an amazing stability of the quotation, despite the rather turbulent situation on the global oil market. Low prices for Urals, of course, worry the Ministry of Finance.
The difference in the price of ESPO and Urals can be $15-20 or more, which causes additional concern and a desire to get attached to some other benchmark in order to avoid the super-discount nature of the Urals cost.
At the same time, at the initiative of the Ministry, a law was adopted on the marginal discount in determining the price of oil. It contains a rather cautious rate of discount reduction — $3 each month. We understand that a sharp reduction, on the one hand, would immediately lead to an increase in budget revenues, on the other hand, it would put some oil companies in a difficult position, because they would be faced with a choice whether to reduce production or look for companies on the market that would be ready to buy raw materials from them at such a cost."
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