Russian tax freeze set to hit Gazprom

RUSSIA will not increase its mineral extraction tax for independent gas producers, finance minister Alexei Kudrin said yesterday, leaving state export monopoly Gazprom to bear the brunt of tax increases.

Gazprom deputy chief executive Alexander Ananenkov warned that if the ministry carries through with proposed output levies, production would decline.

“More gas will end up staying in the ground,” said Ananenkov. “Extraction companies will wait for the economics to improve.”

The government is revising its tax policy to boost revenue from the energy sector.

Ananenkov said output was already due to fall this year to 505.6bn cubic metres from 508.6bn cubic metres last year.