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Russias oil export duty set to slide in May, hitting refining margins

April 20/2020

MOSCOW (MRC) -- Russias oil export duty CL-EXPDTY-RU, a key source of tax revenue for the government, is likely to plummet in May to its lowest level in nearly two decades if oil prices stay low, Reuters calculations showed.

The expected sharp decline in duty paid by Russian oil exporters will encourage oil producers to sell crude oil and make refining it less attractive, hitting the profit margins of Russian refineries.

The duty is currently set at USD52 per tonne for April. The Russian finance ministry will calculate the duty for May on the basis of prices of Russian Urals crude blend recorded between March 15 and April 14.

If Urals prices stay at around USD19 per barrel, the crude oil export duty for May would be set at USD7.5 per tonne. If the prices rise to USD30 or USD40 per barrel, the duty is expected to reach USD10.5-USD13.7 per tonne next month, according to Reuters calculations.

That would be the lowest level of oil export duty since at least 2002, due to the collapse of oil prices amid oversupply and restrictive measures taken to curb the global spread of the coronavirus.

Urals URL-E were trading at around USD18.55 per tonne on Tuesday.

As MRC informed earlier, based on the results of operations in the 1st quarter 2020, Gazprom neftekhim Salavat ramped up its stable gas condensate throughput and production output. The throughput performance of stable gas condensate during the 1st quarter 2020 (1 502 thousand tons) has grown by 15.7% at the Companys Oil Refinery, as compared to the same period last year (1 298.5 thousand tons) due to increases in supplies.

It was previously reported that Gazprom Neftekhim Salavat (STS), one of the largest Russian petrochemical producers, plans to start scheduled repairs of acrylate production on April 20. This production will be closed until May 30.
Author:Anna Larionova
Tags:petroleum products, crude oil, PE, ethylene, Gazprom neftekhim Salavat, Russia.
Category:General News
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