Russia set to delay fuel oil export duty hike

June 25, 2014

Russia's finance and energy ministries have agreed to put back the equalisation of export duties on crude oil and on heavy oil products such as fuel oil to 2017 to allow domestic refineries to finish upgrades, the Finance Ministry said on Wednesday.

Russia had wanted to end the preference in export duty enjoyed by low-grade mazut from 2015 to try to remove incentives for its production and instead encourage refinery upgrades to produce higher-priced oil products for export.

Some refiners lobbied for more time to complete their upgrades, saying that otherwise refinery output could fall, pushing up domestic fuel prices.

The decision has yet to be approved by the government as a whole, and would then need to be signed by President Vladimir Putin. The Energy Ministry declined immediate comment.

Copyright, Reuters, 2014.