According to Reuters article published on February 3, 2023, Russia may switch to taxing oil producers based on Brent crude prices rather than the currently used Urals benchmark, after Western sanctions drove down the price of the latter, the Kommersant daily said on Friday, citing sources.
After the G7 grouping introduced a price ceiling on Russian oil, the gap between Urals, the traditional Russian crude benchmark, and Brent has widened to up to $40 per barrel, the paper said.
To avoid excessive damage to budget revenue from lowering oil taxes, President Vladimir Putin last month ordered the government to draft proposals on adjusting the tax framework, and switching to a Brent-based model featuring discounts and freight costs calculated monthly is the key idea so far, the daily cited anonymous sources as saying.
The move is certain to increase the tax burden on the sector and may prompt companies to start cutting output, it added.
