"Revolutionary" new law means Russian oil taxes depend on world oil price
[Presenter] The State Duma today took a decision which the deputies themselves say is a revolutionary one. Here is
Vlada Vishnevskaya with the details:
[Correspondent] The deputies approved virtually without debate a new method of regulating the surplus profits of oil
companies. Namely, export duties for oil and oil products will depend on world oil prices. If the prices go up, then the
export duty rate will too. Thus, in accordance with the government's proposal, a differentiated scale is to be
established.
[Deputy Finance Minister Sergey Shatalov addressing the Duma] If prices fall below the level of 18 dollars per
barrel, then taxation falls slightly. This means that the government assumes additional risks should prices fall. But
when prices are higher, the government receives additional income, as the oil companies pay additional taxes.
[Correspondent] In addition, the rate of tax on the extraction of mineral resources is being raised. The government
representative said that this decision had been taken following consultations with the oil companies. The Cabinet of
Ministers calculated that the law should come into operation as from 1 August. If this does not happen, with oil prices
as they are, every month of delay will cost about 170m dollars. After listening to the government, the deputies did not
delay in adopting the decision and voted for the proposed documents in three readings at once.
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