Russia's Energy, Finance Ministries might soon reach compromise on tax maneuver

The Russian Ministry of Energy expects in the near future to work out a compromise proposal on the timing of completing the oil industry tax maneuver with the Ministry of Finance. The parties are in a constructive phase of negotiations, Russian Minister of Energy Alexander Novak told.

"We are now in a rather constructive dialogue with the Ministry of Finance," he said. "I think that in the near future we will work out certain proposals that will be a compromise for everyone," Novak added.

According to Novak, the issues of completing the tax maneuver and stimulating oil refining are different, unrelated topics. "In fact, these are two different topics. The first concerns stimulating measures to support oil refining plants, that marginality has dropped dramatically due to tax maneuvers. The second is a proposal on export duty," he said.

According to the Minister, clear and long-term rules of the game for the main players on the market are the main incentive for modernizing oil refineries. "Oil refining is a big investment, a cycle of modernization and commissioning of plants," Novak said, "We need to define the rules of the game and the goals for refining. And then attract financial resources that could be used for modernization," he added.

Speaking about the deadlines for completing the tax maneuver in the oil sector, Novak added, "the main thing for the industry would be that it should have zero effect, so that there is no additional tax burden." "This is a redistribution of the existing tax burden," he said.