Russia has introduced new tax regulations on overseas shipments, and based on customs data, Reuters has calculated that this could cost fuel oil exporters up to US$1 billion (€850 million) per year.
The new rules come into effect on 14 September 2020 and Reuters reports that it will close a loophole that has allowed exporters to avoid export duties, for example by passing off fuel oil and other heavy refining products as duty-free products such as heavy oil residue. Last year exporters could have an earned an extra US$1 billion by exporting more than 12 million tonnes of products using the loophole.
Refining margins have been high thanks to the loophole, but Reuters has calculated that at a domestic oil price of US$47.50 per tonne, export duty will rise from US$7 per tonne to US$31 per tonne for exports of light oil products.
Around a third of Russia’s budget revenues come from the oil and gas industry, and income overall has been hit hard by the COVID-19 pandemic. The government is now trying to increase income again.