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Russian gain from Oil Tax
The export duty is designed to recapture part of the oil sector's earnings, Finance Minister Aleksei Kudrin and Economic Development and Trade Minister Gherman Gref told reporters after a joint meeting of their ministries' boards on Friday. Excess earnings incited by high oil prices will be recaptured through severance tax and through a higher export duty, said the ministers. These taxes are to be raised only in the event of a favourable situation on the world oil market, emphasised the ministers. A higher severance tax may send domestic oil prices up, while the export duty will help avoid the hike, added Mr. Kudrin. The budget can get up to $2 billion in extra receipts when the crude price is $27 per barrel, and $900 million with when oil costs $24 per barrel, according to the finance minister. Mr. Kudrin believes this is an absolutely affordable burden for oil producers. "None of the oil companies will shrink production in Russia. You have my word for that," said Mr Kudrin. A stronger ruble has alleviated the severance tax burden on the oil sector. It has shrunk at least 12% over the past 2 years, according to the finance minister.
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