Russian Government Considering Gas Price-Linked Taxing

The Russian government is considering a plan which would see tax extraction rates linked to gas prices, Russian newspaper Kommersant has reported. The tax plan is reportedly under consideration by Russian Finance Minister Anton Siluanov.

If implemented, the tax charge would stifle the potential for any growth arising from increased prices planned by Gazprom, with Kommersant estimating that the government tax take could total 80 per cent of any increase in net from the increases. 

Gazprom said on Friday that it was working on a plan to increase prices to domestic customers. The plan would see Gazprom add a 26.3 per cent increase to gas prices in winter of this year in addtion to a 15 per cent increase planned for June of this year.

"Preparation of materials to justify an additional rise is under way," head of Gazprom's transportation and gas storage department, Alexey Melnikov said.

The tax, if levied, would increase the government's tax take from Gazprom by around 50 billion rubles (approximately €1.3 million) in the third and fourth quarters of 2013, Kommersant reported.

Gazprom has pushed ahead with the price increases in response to the planned taxed additions despite instructions from president-elect Vladimir Putin to save money through efficiency rather than raising revenue through price increases.