Lukoil Supports Proposal to Hold Gasoline Excise Tax Increases to Inflation

Strategic Insights -

Lukoil President Vagit Alekperov recently expressed support for a proposal from the Federal Antimonopoly Service to increase the gasoline excise tax at the level of inflation. Alekperov emphasized the importance of balancing tax increases with price adjustments, stating that raising the excise tax by 1% would lead to a 10% increase in gasoline prices, which is unsustainable. This proposal involves fully supplying the market with fuel, reducing gasoline prices by setting an export duty on all gasoline grades at 90% of the crude oil export duty, and gradually reducing the excise tax when oil prices hit $90 per barrel.

Key Takeaways:

  • Lukoil supports the Federal Antimonopoly Service's proposal to increase the gasoline excise tax at the level of inflation.
  • Raising the excise tax by 1% would lead to a 10% increase in gasoline prices, which is not feasible according to Lukoil President Vagit Alekperov.
  • The proposal involves setting an export duty on all gasoline grades at 90% of the crude oil export duty and reducing the excise tax when oil prices hit $90 per barrel.
  • Lukoil is interested in cooperating with Rosneft on the Black Sea and Barents Sea shelves, and in the global hydrocarbon market.
  • Joint operations in Timan-Pechora are expected to generate synergies in capital investment and applying technological innovations.
  • Lukoil is considering a joint bid in new tenders on major fields with Rosneft, Bashneft, and Gazprom Neft.
  • The company is studying opportunities to build solar power stations in Central Asia as part of its alternative energy projects.

Statistics:

  • 10% increase in gasoline prices from a 1% increase in excise tax (according to Lukoil President Vagit Alekperov's statement).
  • 90% export duty on crude oil, which could be applied to all gasoline grades (as proposed by the Federal Antimonopoly Service).
  • $90 per barrel oil price threshold for reducing the excise tax (as proposed by the Federal Antimonopoly Service).
  • 90% of the crude oil export duty as the proposed export duty for all gasoline grades (as proposed by the Federal Antimonopoly Service).

Sources:

  • Profile magazine's interview with Lukoil President Vagit Alekperov.
  • Interfax news outlet report on Lukoil's support for the proposal to increase the gasoline excise tax at the level of inflation.