Russia May Discount Heavy Crude Oil Export Duty

Russia, the world's largest oil producer, may lower the export duty for heavy crude to 10 percent of the standard rate as it seeks to stimulate production, according to Kommersant newspaper.

A government commission headed by Deputy Prime Minister Igor Sechin approved the Energy Ministry proposal, which would extend the discount for heavy, or viscous, oils for 10 years from July 1, Kommersant reported, without citing any sources.

The lower duty would save companies $100 million a year at current production levels of heavy crude and could provide as much as $1.3 billion in annual tax savings if output of that grade increases according to Energy Ministry forecasts, the newspaper said.

Heavier crude grades yield less lucrative products such as gasoline and diesel compared with lighter blends and typically contain more sulfur.