Russia poised to increase crude export tax by 17%

BEIJING, May 5 -- Russia will increase its crude export tax by 17 percent to a record on June 1, after oil prices rose in March and April.

The tax will be set at 398.10 U.S. dollars a metric ton, the seventh consecutive increase, Alexander Sakovich, deputy head of the Finance Ministry's customs department, said by telephone in Moscow. The current duty is 340.10 dollars a ton, or 46.40 dollars a barrel.

Russia revises its export taxes on crude and oil products every two months based on the previous two-month average price for Urals, the country's benchmark export blend. That stood at a record 102.76 dollars a barrel in the period, Sakovich said.

"The government is addicted to high oil revenues," Michael Teagarden, a sales trader at UBS AG in Moscow, told Bloomberg News. "Russia needs to wean itself from this windfall and encourage producers to spend the money developing new fields."

Russia's oil production, which fell to an 18-month low of 9.72 million barrels a day in April, may decline this year for the first time in a decade as producers struggle with high costs.

(Source: Shanghai Daily)