The potential tax manoeuvre might decrease the number of
To recap, the Ministry of Energy recently reported that the potential tax manoeuvre might mean that four of Rosneft’s refineries (Komsomolsky, Ryazansky, Saratovsky and Achinsky) as well as Surgutneftegas’ Kirishi become
As detailed in our Russian Oils: Tax manoeuvre — Snatch, Turkish and Tommy, of 30 June, in refining, the growth in crude netback would mean more expensive feedstock for domestic refineries. However, assuming a netback pricing mechanism, the profitability of upgraded refineries would improve unless the government visibly limits gasoline and jet fuel prices' corresponding adjustment.
Based on our company models (all macro and operating assumptions intact), we calculate that the proposed changes to oil sector taxation (
Given that the paper recaps what has already been stated earlier, we do not expect any market reaction in the oil names. We remind investors that MinFin expects to reach an agreement with the oil companies on the upcoming changes in the tax regime for the industry by the end of July.