According to Kommersant, the Ministry of Finance has suggested introducing an excise duty on heating oil from the middle of next year. Its proposal is RUB 5.86 (USD 0.19) per tonne starting from 2H13, RUB 6.45 (USD 0.2) per tonne in 2014 and RUB 7.73 (USD 0.25) per tonne in 2015.
The production split of oil majors under over coverage does not include any significant amount of heating oil. In our view, this initiative relates to simple refineries and the government intends to cancel the currently available schema of substituting diesel oil with heating oil (which was not previously subject to excise duties). We do not expect any market reaction to the news.