Ambassador: Russia not to buy Belarusian refineries as compensation

MOSCOW, Mar 14 (PRIME) -- Russia has no plans to cushion the effect of its oil taxation changes to Belarus by buying its refineries, ambassador to Minsk Mikhail Babich told PRIME in an interview on Thursday denying media reports.

“In the current situation there is hardly anyone who could be interested in these plants. A large-scale upgrade is taking place, serious investments have been made, and the colleagues will have to do a lot to make the investment return,” Babich said.

In August, Russian President Vladimir Putin signed into law a bill on the final stage of a tax reform, which implies reduction of the oil and oil product export duty by 5 percentage points annually from the current 30% within six years starting from 2019 and raising upstream taxation within three years.

For Belarus, the reform will mean a higher price of oil imported from Russia and a lower income from export duties on oil products, as Russia delivers 18 million tonnes of duty-free oil to the Belarusian refineries every year and additional 6 million tonnes participate in a re-export mechanism sending the export duties to Belarus’s budget.

In December, Putin and Lukashenko failed to align their positions on compensation for the Russian tax maneuver. Russian Finance Minister Anton Siluanov said that Moscow is ready to compensate Minsk for the changes by providing subsidies to Belarusian refineries only if the Russia–Belarus Union State continues to integrate on the initiative by Belarus.

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