What does the new increase in fuel excise taxes mean

23.10.2024

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On October 22, 2024, the State Duma passed a package of amendments to the Tax Code in its third reading, which include changes to fuel excise taxes. According to the document, the excise tax on Euro-5 gasoline will increase by 14% starting in 2025 (from 15,048 to 17,088 rubles per ton), and on diesel fuel by 16% (from 10,425 to 12,120 rubles per ton).

The rise in excise taxes will contribute to higher costs for oil companies, which have already faced additional expenses this year. This is indirectly confirmed by data from Rosstat, which shows that the profit-and-loss balance of oil refineries decreased by 29.4% in the first seven months of 2024, amounting to 1,563 billion rubles.

To minimize the risk of price increases in this situation, it is essential to reduce the expenses of oil companies. This includes, in particular, lowering railway tariffs.

According to analysts from OPEN OIL MARKET, eliminating the current asymmetry in railway tariffs could become a key measure to curb fuel prices. By equalizing rates for the transportation of coal and petroleum products, it would be possible to offset the impact of rising excise taxes.

However, tariff adjustments should be implemented alongside other measures to contain price growth. These measures include maintaining the current corporate income tax base rate for refineries (set to rise from 20% to 25% in 2025) and increasing exchange trading quotas for gasoline and diesel producers. Without these measures, the fuel market may face a new wave of price hikes at the beginning of next year.

Translated using ChatGPT.

Source: https://companies.rbc.ru/news/mzvTwH2VaE/chto-oznachaet-novoe-povyishenie-aktsizov-na-toplivo/

#Excise Duties #Fuel Excise Tax #Fuel Price Increase #Excise Duties #Economic Policy #Fuel Market #Taxation Policy #Russia Fuel Prices #Energy Industry #Oil and Gas Sector #Fuel Taxes Impact #Government Regulations #Energy Economics #Transportation Costs

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