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Losses of Belarusian oil refineries due to tax maneuver estimated to reach $5.8bn by 2025

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MINSK, 28 November (BelTA) – Losses of Belarusian oil refineries (OAO Naftan and Mozyr Oil Refinery) due to the tax maneuver in the Russian oil industry will reach $320 million in 2019. With the world price for oil at $60 per barrel, the losses will reach $5.8 billion in 2019-2024, BelTA learned from an interview with Deputy Chairman of the Belarusian state petrochemical concern Belneftekhim Andrei Bunakov.

Andrei Bunakov said: “With the annual amount of processed oil at 18 million tonnes and the global price for oil at $60 per barrel, losses of the two refineries are close to $320 million in 2019 alone. Meanwhile, the oil price [Belarus pays] is already close to 80% of the global price. In 2019-2024 losses of the Belarusian oil refineries due to the tax maneuver (in comparison with the conditions that were in effect before the tax maneuver was introduced in 2018 and with oil priced at $60 per barrel) will be about $5.8 billion.”

The tax maneuver consequences the Belarusian oil refineries have to deal with include annual increases in oil prices (with the global price at $60 per barrel, oil price will rise by $17.7 per tonne every year) until oil prices reach the global level as from 2024. As a result, the economy of the oil refineries has considerably worsened and requires compensatory measures.

According to Andrei Bunakov, due to falling customs subsidies the business strategy of the Belarusian oil refineries needs to be adjusted bearing in mind general international trends in the development of continental refineries.

Russia started adjusting the taxation of its oil industry in 2015. The first stage was completed by 2018. The final stage began in 2019. It will end in 2025.

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