OREANDA-NEWS. June 10, 2015. The Ministry of Energy does not support any amendments to the tax manoeuvre in the oil and gas industry, based on an analysis of the 1Q15 results, according to Vedomosti. The paper reports that the refining margin of an average Russian refinery in 2015 might be around USD 2/bbl, assuming average oil price at USD 47/bbl and RUB/USD at 63. There are no any official details on the matter yet, nor have the authorities taken any decision.

We have written on a number of occasions that the tax manoeuvre introduced on 1 January 2015 might have unpredictable consequences, and lower global prices for oil and oil products, along with the significant depreciation of the rouble, mean that its effect could well differ significantly from what was initially planned. However, we believe that regular manual interventions in the sector tax regime might not allow companies to perform proper strategic planning and might have a negative effect on the industry. Therefore, we would treat a stabilising tax regime over the next few years as a supportive development for the sector. However, we deem the newsflow as neutral stock-wise. Assuming similar parameters, we calculate that the refinery margin for 2015 will reach 3 USD/bbl, taking into account the actual numbers for 5mo15.

To recap, the Ministry of Finance submitted a tax regime proposal for 2016-18 to the government in April. The Ministry rejected the correction to the recently adopted tax manoeuvre. The tax on financial results (TFR) was not mentioned in the project.

Dmitry Loukashov, Ekaterina Rodina, Alexander Donskoy, Kirill Komarov
VTB Capital analysts