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21 February 2020, 14:29

Belarus' losses from lower Russian export duty on oil estimated at $420-430m

Aleksandr Lukashenko and Vladimir Semashko
Aleksandr Lukashenko and Vladimir Semashko

MINSK, 21 February (BelTA) – Belarus' losses from Russia's decision to reduce the export duty on oil are estimated at $420-430 million. Belarus President Aleksandr Lukashenko made the statement as he met with Ambassador Extraordinary and Plenipotentiary of Belarus to Russia Vladimir Semashko on 21 February, BelTA has learned.

Aleksandr Lukashenko said: “We are going to make calculations now after negotiations with Putin and his proposal. Simple enough to calculate our losses from the reduced customs duty on oil. We lose roughly $420-430 million considering we are supposed to receive 24 million tonnes of Russian oil this year.”

“Putin suggested they will compensate the money to Belarus. He admitted it was only fair,” Aleksandr Lukashenko stated.

Aleksandr Lukashenko mentioned Vladimir Putin had said the compensation would come out of the pockets of Russian companies. “At the expense of Russian companies? Fine. At least we make progress. And we will keep working on it,” the Belarusian leader added.

BelTA reported earlier that Russia gradually reduces the export duty and raises the tax on extracting mineral deposits as part of the so-called tax maneuver in the Russian oil industry. Oil price for Belarus grows as a result and will reach the world one in 2024.

In an interview with BelTA First Deputy Prime Minister of Belarus Dmitry Krutoi explained that the first stage of the tax maneuver began in Russia on 1 January 2015. “We saw it happen and arranged talks. Back then they agreed to transfer as much export duty to our budget as possible in 2015. The limit of $1.5 billion was removed but only for the year 2015. Since oil price plummeted back then to $50 per barrel, we received only $1.3 billion. In other words, the removal of this limit did nothing and we did not exceed $1.5 billion in line with the baseline agreement,” the official noted.

In his words, the tax maneuver kicked in later on. The oil price Belarus pays started rising as a result. “It turns out that in 2016-2018 we received a total of only $2.3 billion in export duties. We received $1.3 billion in the first year – 2015 – even considering the reduced price for oil. Later on we received only $2.3 billion over the course of three years due to the tax maneuver. An average of $700-800 million per year. The sum is roughly the same right now,” Dmitry Krutoi said. “Since the tax maneuver continues, the sum of the difference between customs duties on oil and oil products will grow smaller for our budget. We will reach a genuine world price in 2024. It will make no difference for us where to buy oil then – in Russia or elsewhere.”

At present the oil price Belarus pays is roughly 17% below the world one (purely by the size of the duty). “If we remove the duty and take a look at the clean price for oil traded between companies, the price is in essence the world one,” the official stressed.

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