Duty free oil exports to Belarus mean USD 5 billion in lost revenue for Russia - Mr Putin

Interfax citing Mr Vladimir Putin Prime Minister of Russia as saying that duty free oil exports to Belarus in 2011 will mean USD 5.3 billion in lost revenue for Russia.

He said that "We are delivering 20 million tonnes to 21 million tonnes of oil to Belarus duty free next year. That will cost our budget and we will have lost revenue of roughly USD 5.3 billion."

A portion of the loss will be offset by duties on Belarusian exports of oil products made from Russian crude oil.

Mr Putin said "We agreed that Belarus would pay us 100% of the revenue from duties on export of oil products made from our crude. Belarusian refineries operate almost exclusively on our oil. If that amounts to roughly USD 3 billion, then our net lost revenue amounts to USD 2.3 billion."

However, that partial offset will be erased by the shift to duty-free gas exports to Belarus. He said that "We will deliver gas to Belarus duty-free. That means our budget will lose another USD 3 billion in revenue."

In addition, Belarus will not pay export duty revenue to Russia for export of oil product made from Belarus' domestic production.

Mr Putin said "We agreed to exclude 1.7 million tonnes in Belarusian oil production from consideration. We won't receive anything for that. That may seem equitable. But that's only at first glance, because the export duty on crude oil is several times greater than the export duties on oil product. It's clear that all the crude oil they produce will be exported, generating revenue for the budget, and they will use our oil to meet domestic demand."

He said that "We are doing it this way deliberately, in order to support the Belarusian economy."


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