Moscow (Platts)--24Jul2009

Russia's finance ministry wants to increase taxes for gas and oil
products, as it is looking for additional revenue sources to fill gaps in the
country's budget for 2010, Russia's Interfax news agency said Friday.

The ministry has suggested increasing the mineral extraction tax for gas
by 10.2% to Rb162/1,000 cubic meters ($5.20/1,000 cubic meters) from the
current Rb147/1,000 cu m, the news agency said, citing several unnamed sources
in the ministry.

The move would allow Russia to collect an additional Rb7 billion ($225
million), which would lift total revenues from the gas mineral extraction tax
to around Rb80 billion in 2010, one of the sources said.

The source added that initially the ministry planned to hike the tax to
Rb255/1,000 cu m to get an additional Rb50 billion, but later decided to seek
a smaller increase.

The ministry also is proposing increasing the export duty for gas to 35%
from 30% currently, which would raise an additional Rb53 billion, a source
said according to the report.

The increase in the gas industry's tax burden is "justified," given that
the oil sector's tax burden is twice as high, the source said.

The finance ministry has tried to increase taxation in the gas sector for
several years, but Russia's gas monopoly, Gazprom, the key taxpayer in the
industry, has managed to resist those efforts so far.

OIL PRODUCTS TAX

The ministry is also seeking an increase in export duty for the oil
products basket, of 1.5% on average, in an effort to raise an additional Rb15
billion-Rb16 billion, another source told Interfax.

Several options are under consideration, including a 5% rise in export
duty for heavy products and an increase in the duty for gasoil, the source
said.

"All the options are aimed at receiving an additional Rb15 billion," the
source was quoted as saying.

Russia's authorities have been considering equalizing the export duties
for light and heavy products, but the move is not expected to take place until
2011.

At present, export duties for light and heavy products are some 30% and
60% less, respectively, than the duty for crude oil.

Russia is currently changing its export duties every month to reflect
changes in crude prices on international markets. For July, the export duty is
set at $212.60/mt ($29.12/barrel) for crude oil, $155.50/mt for light products
and $83.80/mt for heavy products.

GOVERNMENT TO CONSIDER THE DUTY-HIKE PLAN NEXT WEEK

The finance ministry declined to comment on the report.

"It is too early to comment as the figures have not been made public
officially yet," a spokeswoman with the ministry said.

But she said that Russia's President Dmitry Medvedev is expected to
consider the draft budget for 2010 on Friday, while the government is to
discuss the issue at its meeting next Thursday.
--Nadia Rodova, nadia_rodova@platts.com