PRESS: Russia mulls using Brent or Dubai Crude price for taxes

MOSCOW, Jan 20 (PRIME) -- The Russian government is discussing replacing the Urals blend, the country’s key export, with the premium blends Brent or Dubai Crude to calculate taxes because of the current discount to the Urals price, Vedomosti business daily reported on Friday.

At a January 11 meeting, Deputy Prime Minister Alexander Novak told President Vladimir Putin that the major problem of the national oil market is a high discount to the Urals price because of a high cost of freight that caused by the risks of possible sections. In response, Putin asked the government to consider the problem so that it does not hurt the budget.

Sources close to the government told Vedomosti that the main option the government was considering was to tie the Urals price to the Brent or Dubai Crude blends, using their average price excluding a certain discount in calculation of taxes. The discount’s amount is under discussion, but the government considers the actual average discount to the Brent price at U.S. $10–15 per barrel.

One of the sources said that the current geography of sales of Russian oil makes the Dubai Crude the most reasonable choice, the business daily reported.

The Tax Code currently uses the Urals average international price for the tax period while calculating taxes, but the Mediterranean and Rotterdam markets currently receive almost no Russian crude because of the Western sanctions.

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