MOSCOW (MRC) -- ulgaria’s parliament backed bolstering tax controls over the country’s biggest fuels seller, owned by Russia’s Lukoil, as the government looks to boost revenue depleted by the state of emergency over coronavirus, said Reuters.
Under the changes, expected to be finally approved next Tuesday, Lukoil Bulgaria will have one month to apply to register as separate tax entities its six fuel depots along with a 400-km long fuel pipeline that runs from the LUKOIL Neftochim Burgas oil refinery across the country.
Finance Minister Vladislav Goranov said the changes were needed to improve transparency and proper collection of excise duties from fuel sales in times when the state finances are strained from the coronavirus crisis.
Lukoil Bulgaria, which controls the major fuel depots and has over 220 petrol stations, said it might be forced to halt operations as it would not have enough time to comply.
The customs office considers the six depots and the pipeline as one tax fuel depot at present.
The company’s current licence will be revoked if it fails to apply for new separate licences within a month and will have until the end of November at the latest to bring the new separate tax fuel depots up to customs office standards.
“In these times, when the budget is under pressure because of the crisis from the pandemic, we have to be as diligent as possible to collect what is due,” Goranov told reporters.
“It is virtually impossible for the customs officers to ensure reliable controls on a pipeline that can contain 27 million litres of fuels - which is the whole country’s consumption for several days - and which is linked with several fuel depots,” he said.
Lukoil Bulgaria said in a statement it would not have enough time to install costly metering equipment and software and that it has always been a diligent taxpayer.
In July 2011, the customs office stripped LUKOIL Neftochim Burgas oil refinery of key operational licences for its failure to install on time product metering needed to enable officials to monitor production and calculate precisely due taxes.
The refinery appealed the decision and had its licences restored in early 2012 after installing proper metering and reaching an out-of-court agreement with the customs office.
As MRC informed previously, Stavrolen (part of Lukoil), Russia's major polyolefins producer, resumed its polypropylene (PP) production in Budennovsk after a long scheduled turnaround. The plant's customers said Stavrolen had fully resumed its PP production after the long scheduled maintenance by 15 October 2019. The outage began on 6 September. The start-up of the plant"s high density polyethylene (HDPE) production took place with a week delay.
According to MRC's ScanPlast report, estimated PE consumption totalled 383,760 tonnes in the first two month of 2020, up by 14% year on year. High density polyethylene (HDPE) and linear low density polyethylene (LLDPE) shipments increased due to the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market were 192,760 tonnes in January-February 2020, down by 6% year on year. Homopolymer PP accounted for the main decrease in imports.
Lukoil is one of the leading vertically integrated oil company in Russia. The main activities of the company include operations for exploration and production of oil and gas, production and sale of petroleum products. Lukoil is the second largest private oil Company worldwide by proven hydrocarbon reserves. Lukoil's structure includes one of the largest Russian petrochemical plant - Stavrolen.
MRC