Russian Oil Tax Hike Rejected

Russian Prime Minister Dmitry Medvedev has rejected calls to raise the mineral extraction tax (MET) for oil producers, a government spokeswoman said on Monday, while a source told Reuters a gas output tax hike was being considered instead.

Rather than hike MET, Natalia Timakova, the spokeswoman, said the government would instead consider ways of reducing export duties on oil more slowly than previously planned.

"The prime minister has taken a decision not to adjust MET after a meeting," said Timakova. "However, options to reduce oil export duty more slowly will be considered, as well as adjustments to some other sources (of revenue) in order to obtain extra funds."

The idea of raising MET was put forward by the finance ministry, which had suggested changing the way it was calculated in order to bring in about 600 billion roubles in additional revenues in 2016.

Medvedev's decision came as a source told Reuters the government was considering raising the mineral extraction tax for gas and gas condensate producers instead, by 100 billion roubles ($1.52 billion) and 200 billion roubles respectively.

Economy Minister Alexei Ulyukayev later confirmed the Russian government was considering changes to gas tax.

Russia, whose economy is expected to shrink by between 3.9 and 4.4 percent this year, is seeking ways to fill the state's coffers which have been depleted by an economic downturn, the falling price of oil, and by the impact of international sanctions imposed over the Ukrainian crisis.

The government is under pressure to take some tough decisions by Oct. 25, when it must submit the 2016 budget to parliament.

Reporting by Darya Korsunskya and Denis Pinchuk