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Belarusian oil industry getting ready to work with higher prices for Russian oil

Economy 11.01.2018 | 12:52

MINSK, 11 January (BelTA) – The Belarusian oil processing industry is laying some groundwork in anticipation of Russia's decision to lift export duties from oil deliveries, BelTA learned from Andrei Rybakov, Deputy Chairman of the Belarusian state petrochemical concern Belneftekhim.

The Belneftekhim representative said that for several years the Belarusian oil processing industry has been dealing with gradually rising prices for Russian oil. Due to the so-called tax maneuver the price Belarus pays for Russian oil is gradually approaching the international price. For instance, in 2017 Belarusian oil refineries paid about 80% of the international oil price in order to get Russian oil. Andrei Rybakov pointed out that the oil refineries have to pay an export duty to the state budget if they want to export their oil products. Due to this fact the oil refineries have to deal with costs approaching those involved in buying crude oil at international prices.

According to the Belneftekhim representative, a special formula is used to price Russian oil deliveries to Belarus. If Russia lifts the export duty, the price for Russian oil will go up and will be close to the international price. Russia has yet to decide when the export duty is to be lifted. “However, we are working hard to prepare for the expected changes,” noted Andrei Rybakov. In order to reach this goal, Naftan and Mozyr Oil Refinery are being modernized and work is in progress to improve the performance of the oil refineries in market price conditions. With a greater crude oil upgrading index the refineries will be able to increase their profit margin and stay competitive on the global market.

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