MOSCOW: Russia's economy and energy ministries are opposed to a proposal to change the way the Mineral Extraction Tax (MET) is calculated because it could hit oil output, officials said on Wednesday.
With state revenues falling, the finance ministry has proposed changing the MET formula to raise around an extra 600 billion roubles ($9.2 billion) for the budget next year.
"This measure would adversely affect the economics of existing deposits and essentially 'kill' production at the most efficient deposits in terms of tax proceeds," Nikolai Podguzov, a deputy economy minister, said in a statement.
Interfax news agency, citing oil companies estimates, said that a higher MET would cut overall oil production by 100 million tonnes in next three years, while investments would decline by 2 trillion roubles.
The agency said the companies had drafted the estimates for a letter to be sent the government.
Russian oil output is near post-Soviet highs of about 10.7 million barrels a day and the weak rouble means oil firms are earning bumper profits despite lower oil prices.
The finance ministry has proposed taking some of this profit for the budget.
"We consider this (MET change) as too much. The Energy Ministry does not support (it)," Alexei Teksler, first deputy energy minister, was quoted by Interfax news agency as saying.
Vedomosti newspaper quoted sources as saying on Wednesday that oil firms are proposing that the government should raise taxes on the gas industry instead, an idea the finance ministry is familiar with, Finance Minister Anton Siluanov told reporters.
"But we think that for gas companies, first of all for Gazprom, one could talk not about an increase in the (tax) burden but rather about lowering regulated gas prices on the domestic market," Siluanov said, without clarifying.
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