Russia Cuts October Oil Export Duty 7.4% on Revised Rate, Price

Russia will reduce its export duty on most crude shipments by 7.4 percent on Oct. 1 after Prime Minister Vladimir Putin approved a tax measure to spur production and oil prices fell.

The standard duty will drop to $411.40 a metric ton ($56.12 a barrel), according an order signed by Prime Minister Vladimir Putin and published in Rossiyskaya Gazeta, the state newspaper. The duty is calculated using a tax rate of 60 percent, down from the 65 percent applied previously. This month, oil exports are taxed at $444.10 a ton.

The discounted rate on some Eastern Siberian and Caspian Sea oil will fall to $204.50 from $205.10 this month.

Russia bases its export duties on the average Urals price from the 15th day of one month to the 14th day of the next. Urals, Russia's benchmark export blend, averaged $112.26 during the most recent monitoring period, Alexander Sakovich, a Finance Ministry adviser, said on Sept. 15, 2011. 

The government is setting the 60 percent rate "by hand" each month before a tax amendment is passed into law, Sakovich said in August. Putin last month signed an order unifying the refined product duty at 66 percent of the crude levy.

Exports of refined products will taxed at $271.50 a ton next month, according to the order. That will cut the duty on middle distillates such as diesel by 8.7 percent, while raising the rate for heavy products like fuel oil by 31 percent.

A special gasoline tax that Putin imposed starting May 1 to fight domestic shortages may fall to $370.20 a ton. That is 90 percent of the crude duty.

Liquefied petroleum gases, such as propane and butane, will be taxed at $196.60 a ton, according to the order.