UPDATE: Lukashenko says Russia ready to compensate $300 mln for oil

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MINSK, Feb 21 (PRIME) -- President Vladimir Putin has offered a mechanism to compensate Belarus for a shortfall in revenues stemming from Russia’s oil industry reform, the money includes part of companies’ margins from the oil sales to Minsk, Belorussian President Alexander Lukashenko told Governor of the Arkhangelsk Region Igor Orlov on Friday.

“The president has called… You know, we have arguments over issues sometimes, and he made some proposals for us to think about, including those concerning oil deliveries to Belarus. It was an unexpected proposal,” he said.

“(Putin) suggested that a formula should be developed to calculate the sum that we lose from the fall of the tax duty (on oil products exports) in 2020, as compared with the previous year. Suppose, we received a billion of dollars from the duty last year, and this year we could have received $700 million because of the fall of the duty. In this case Russia would compensate $300 million, of which part is to be compensated at the expense of (oil) companies’ margins.”

Russia is ready to retain the financial level of 2019 for oil sales to Belarus, he added.

Lukashenko said that the presidents discussed energy cooperation and implementation of large joint projects.

Russian presidential spokesman Dmitry Peskov told reporters that Russia does not consider compensation of Belarus’s shortfall in revenues from the budget.

“There is no talk about (compensation from Russia’s budget). There are various, so to say, claim positions of the sides, they are being considered,” he said, adding that the negotiations continue.

“Different issues linked to deliveries of Russian oil and its price were discussed during the phone conversation… The topic was discussed by the presidents, but I cannot disclose the details… Of course, it is impossible to impose any non-profitable conditions, which do not comply with Russian and global prices, on (oil) companies.”

The final stage of the tax reform implies reduction of the oil export duty by 5 percentage points annually from the current 30% within six years starting from 2019. The mineral extraction tax (MET) on oil will be increased simultaneously within three years until 2021.

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