Russia Keeps Gas Export Duty Break for Turkey

Russia will postpone for a year cancelling zero export duties for gas destined for Turkey via the Blue Stream pipeline, which would have eased the tax burden for its top gas producer Gazprom, Finance Minister Alexei Kudrin said.

"The Blue Stream is an international agreement and we have not been able to implement changes," Kudrin told journalists at the sidelines of the International Monetary Fund/World Bank fall meeting.

"But in any case, Turkey has nothing to lose - this is a matter of Gazprom's income."

Kudrin added that changes may be implemented next year, for the 2013 budgetary cycle.

Inter-governmental agreement foresees zero export duty for the pipeline, which runs under the Black Sea, till 2015.

The Russian government is increasing spending in preparations for parliamentary elections in December and a presidential poll in March.

The finance ministry had said earlier it was hoping for an additional tax revenues of 150 billion roubles ($5.38 billion) in 2012 from gas producers, mainly Gazprom, which accounts for nearly 80 percent of total Russian gas output .

"We had set for ourselves an income level that we wanted to get to through changes in the gas taxation policy," Kudrin said.

"There was an option that if we cancel Blue Stream duty breaks then we will ease mineral extraction tax (MET) burden on Gazprom."

In July, the ministry had said that the cancellation would mean that for Gazprom would total 431 roubles per 1,000 cubic metres in 2012, 502 roubles in 2013 and 544 roubles in 2014.

With the zero export duty, Gazprom's MET would come to 480 roubles from 237 roubles now. In 2013 it was expected to further increase the MET to 600 roubles and then to 635 roubles in 2014.