Russian customs rule may cost fuel oil exporters $1 billion a year

MOSCOW (Reuters) - New tax regulations on shipments overseas may cost Russian exporters of fuel oil as much as $1 billion a year, Reuters calculations based on customs data show.

Moscow has been looking for ways to shore up state coffers, which have been hit by the coronavirus crisis and the oil and gas industry is seen as a central source of income, generating around a third of the budget revenues.

The state has introduced new customs rules for the export of fuel oil, which take effect on Sept. 14, to eliminate a loophole that has previously allowed sellers to avoid hefty export duty.

Some exporters have used the loophole to pass off the fuel oil and another heavy refining products, including vacuum gasoil, for duty-free products, such as heavy oil residue.

Customs data shows that producers of heavy oil products could have earned an extra $1 billion last year by exporting more than 12 million tonnes of products using the scheme.

Many refineries have enjoyed high refining margins thanks to the loophole. Reuters calculations show that at a domestic oil price of $47.5 per tonne, export duty is likely to rise to $31 per tonne from $7 per tonne for exports of light oil products.

Reporting by Maxim Nazarov, Natalia Chumakova and Ludmila Zaramenskikh; Writing by Vladimir Soldatkin; Editing by Alexander Smith