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Who will pay for Russia's tax manoeuvre?

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27 November 2018

Who will pay for Russia's tax manoeuvre?

Report summary

Big fiscal changes are happening in Russia as the tax manoeuvre continues. Export duty on crude oil and oil products will reduce gradually to zero by 2024. Over the same period, Mineral Extraction Tax for crude oil will gradually rise. The increase in oil MET will more than compensate for the loss in export duty revenue. We estimate the government could raise an additional US$112 billion for 2019-24 from these changes alone. But it's not all about the upstream and the impact on the refining sector and consumer could be profound. After all, somebody has to pay for the increase in tax revenues. We look at who will win and who will lose from the tax changes: • What is the impact on the upstream? • What is the impact on the refining sector and the consumer? • What oil product taxes will rise in 2019 and what are the associated risks? • What can the government do to mitigate the impact of the tax changes? Please see the related attachment for more details on taxes and subsidies calculation.

Table of contents

  • Executive summary
  • What is the tax manoeuvre?
  • Who is going to pay for the increase in government revenues?
  • How does it all work for upstream producers?
  • What about the refining sector?
  • So what can be done to lessen the pain for the refining sector?
  • Keeping the refinery sector happy won't be cheap
  • Who else might lose out?
  • So what is the government going to do to keep the consumer happy?
  • Prices and politics at the pump
  • Conclusion

Tables and charts

This report includes 7 images and tables including:

  • Tax manoeuvre: annual change in tax revenues
  • Remaining government share from oil production: price sensitivity
  • Tax manoeuvre 2019-24: outlines
  • Changes in upstream taxation
  • Effective tax rates during the tax manoeuvre
  • Tax manoeuvre: annual change in investor cash flow in upstream
  • Additional tax revenues vs reverse excise

What's included

This report contains:

  • Document

    who_will_pay_for_russias_tax_manoeuvre.xlsx

    XLSX 174.73 KB

  • Document

    Who will pay for Russia's tax manoeuvre?

    PDF 938.24 KB

  • Document

    Who will pay for Russia's tax manoeuvre?

    ZIP 963.89 KB

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