Russian govt mulling change in calculation of LPG export duties, proposal to temporarily reset it to zero

MOSCOW. July 19 (Interfax) - The Russian government is looking at the possibility of changing the calculation of export duties on liquefied petroleum gases by adjusting price indicators in order to keep their production economically viable.

A source familiar with the minutes of the meeting on the petroleum product market that Deputy Prime Minister Alexander Novak held told Interfax a change in calculation was needed due to the risk of changes in export conditions.

The Energy Ministry, Economic Development Ministry, Finance Ministry and Federal Anti-monopoly Service were instructed to draft a coordinated proposal together with the St. Petersburg International Mercantile Exchange (SPIMEX) and submit it to the government.

Another source said that following a proposal by producers, the option of temporarily canceling the export duty on LPG was being considered until another indicator is embedded in the formula for its calculation.

Currently, export duties on LPG are based on the average DAF Brest (Polish border) price. It is zero at average price below $490/tonne, at a price of $490-640/tonne - 0.5, at $640-740/tonne - 0.6 and above $740/tonne - 0.7.