OREANDA-NEWS. October 05, 2009. Deputy Minister of Economic Development Andrey Slepnev told that the government was discussing the introduction of a unified export duty rate on light and heavy refined oil products beginning in January 2010, two years earlier than originally planned, reported the press-centre of OTKRITIE FC.

At present, export duties on light products and middle distillates equate to c70% of the corresponding export duty on crude oil, whereas export duties on heavy oil products equate to about 40%. Under the original proposal from the Ministry of Economic Development, a unified oil product duty equivalent to 55% of the export duty on crude oil was to be introduced from January 2012.

 This measure was supposed to discourage exports of less valuable heavy oil products and encourage an upgrade of Russian refineries. According to Deputy Minister Slepnev, the unified product duty may already be introduced next year, although the duty rate could (at least initially) differ from the 55% figure.

View: In our view, if adopted, this measure is likely to help accelerate the modernization of Russian refineries. We also estimate that the net impact on those companies with more sophisticated, upgraded refineries (such as LUKOIL, Gazprom Neft, and to a lesser extent TNK-BP) would be positive, whereas companies with relatively simple refineries would have to reduce their exports of fuel oil and/or bring forward investments into secondary refining units (hydrocrackers, hydro-refiners etc).