PRESS: Energy Ministry drafts plan for energy sector support

MOSCOW, Mar 17 (PRIME) -- The Energy Ministry has drafted a plan to support the energy industry in the conditions of sanctions, including reducing taxes and prolonging deadlines for upgrades of oil refineries, as well as rejecting dividend payments in favor of investment programs, Kommersant business daily reported on Thursday citing the document.

Some of the measures may be included in the government’s priority economic support plan, while the ministry acknowledges that the power, oil, natural gas, and coal industries will be unable to comply with de-carbonization plans until 2050, the daily reported.

For the power sector, the ministry suggests a special regime of fines for failure to meet deadlines of upgrades of old thermal power plants and launches of new power generation running on renewable energy sources.

The government should be allowed to change the terms for launches and conclusions of projects that passed capacity outtake auctions, while state-controlled companies will be allowed to spend their 2021 profits on investment programs instead of dividends.

State power grid holding Rosseti will bear no tariff consequences for non-compliance with the 2022–2023 investment program. The transmission tariff for the company may be raised from April 1 instead of July 1 taking into account actual inflation. The ministry also wants to formalize injection of 82.6 billion rubles into Rosseti and 34.4 billion rubles into hydropower giant RusHydro in 2022.

For the oil sector, the ministry suggests switching to paying mineral extraction tax (MET) on the basis of actual sales prices, not the international ones, as companies have to sell the Urals blend with a high discount due to low demand for Russian oil. The ministry also suggested raising the maximum cost threshold for calculations of the excessive profits tax for brownfields of Western Siberia.

The ministry also suggested prolonging deadlines for upgrades of oil refineries for two years, exempting companies from punishment for failure to sell the necessary amount of fuel through the exchange, including gasoline and diesel fuel in the list of socially-important goods, and amending pricing for oil products, polyethylene, and polypropylene to support the companies that provide for the internal market.

(108.0521 rubles – U.S. $1)

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