Russia to hike price for natural gas exports: Kudrin

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Russia intends to raise extraction taxes and customs duties on natural gas, Finance Minister Alexei Kudrin said Thursday in a move that could drastically impact the price paid on energy by Ukraine.

Kudrin told a government meeting that the hike was aimed at raising 150 billion rubles ($5.5 billion) next year as Russia moves to erase a budget deficit that reached 4.1 percent of gross domestic product last year.

The Kommersant business daily quoted a government position paper as saying the higher customs duties would be applied to "specific foreign countries" and lead to a 30 percent jump in the price paid by Ukraine.

Russia's western neighbour has had trouble meeting past energy payments and a pricing dispute resulted in a temporary halt in deliveries at the end of 2008 that led to brief disruption in supplies to some European countries.

Kudrin's announcement follows a government decision to revoke extraction tax exemption from several fields operated by Russia's largest oil companies.

Kommersant said the higher taxes proposal was being bitterly opposed by Russia's natural gas monopoly Gazprom and Igor Sechin -- the powerful deputy prime minister who oversees the energy sector.

But both Sechin and Gazprom supported the idea of raising customs duties since this would in no way affect the company's profits, Kommersant said.

Kudrin said the government was currently deciding the precise rates by which the taxes and export duties would be raised.

Ukraine currently pays no customs duties on Russian gas under a 2010 agreement that is due to expire in 2019.

But Russia is now in the process of completing a new customs union with Belarus and Kazakstan, and officials have hinted that Ukraine's failure to join could added $8 billion to its annual energy costs.

Ukraine has insisted that it will pursue long-term plans to join the European Union, noting that it had no immediate plans to join the Russia-led pact.

© 2011 AFP

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