Russia’s government considers smaller oil tax hike

Russia’s energy ministry has proposed to freeze oil exports duty for January – August 2016 only, not for the whole of next year, a ministry spokeswoman said on Wednesday, citing Deputy Energy Minister Kirill Molodtsov.

The proposal was first reported by Vedomosti business daily, which said that the economy ministry had also supported the proposal.

Under the recently approved plans, no cuts for oil exports duty are envisaged for the whole 2016 period – the measure is seen generating 200 billion roubles ($3.2 billion) for the budget, compared to initial plans for a decrease in the duty next year to 36 percent from 42 percent in 2015.

The energy ministry now argues that additional revenues could be gained from higher than previously planned oil output. It has increased Russia’s oil production forecast by 5 million tonnes to 533 million tonnes in 2016, and exports’ projections have risen by 7 million tonnes to 233.5 million tonnes.