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Companies may suspend supplies of petroleum products to Kyrgyzstan due to regulatory problems

Russian oil producers continue to experience difficulties with the export of oil and petroleum products for regulatory reasons. In February they had problems with deliveries to Kazakhstan due to confusion in documents, and now difficulties have arisen in another direction. As it became known yesterday, domestic oil companies may suspend supplies of petroleum products to Kyrgyzstan, which were previously not subject to taxes. A Vremya Novostey source in one of the companies reported that the Federal Customs Service warned exporters of its intention to levy a 100 percent duty in accordance with the Russian government decree on export duties in the Customs Union.

Exports of Russian petroleum products to Kyrgyzstan are small - about 3 million tons per year. LUKOIL, RussNeft and TNK-BP are working in this area. But the largest exporter is Gazprom Neft, which in 2006 acquired a network of 74 gas stations and several oil storage facilities from Alliance. Thus, the company controls about 70% of the retail market in Bishkek and about 30% of the market throughout the country. There are no oil refineries in Kyrgyzstan, so oil supplies there are insignificant.

A Vremya Novostey source said: “The Federal Customs Service notified us that from April 1 it will begin to collect a 100 percent export duty on supplies of petroleum products.” Previously, according to an intergovernmental agreement concluded in 1995, the import of petroleum products into Kyrgyzstan was duty-free. However, according to the decision of the Russian government dated December 25, 2009, an export duty is imposed on oil and petroleum products “exported from the territory of the Russian Federation outside the states party to the agreements on the Customs Union.” Kyrgyzstan also falls under this rule.

Until April, oil workers were guided by the intergovernmental agreement, and there were no problems at customs. Now companies are waiting for information from the government. “So far, no one can explain to us whether the intergovernmental agreement continues to operate, according to which exports to Kyrgyzstan are not subject to any duties. We are not aware of any documents canceling it. It’s strange that problems have arisen now,” said a source at another company.

Representatives of all companies except TNK-BP refused official comments yesterday. They stated that “so far the company has not received any documents regarding the need to pay duties when exporting oil and petroleum products to Kyrgyzstan.” An official representative of the Federal Customs Service also declined to comment yesterday.

A similar situation occurred in early February on another export route - the border with Kazakhstan. Then oil companies were one step away from stopping the pumping of raw materials to the territory of a neighboring state. The hitch occurred due to confusion in the documents. The Federal Customs Service reported that according to the government decree of January 28, which approved the export duty for February, taxes were imposed on oil “exported outside the territory of the Russian Federation and the territory of the states participating in the agreements on the Customs Union,” which contradicted the text of the December government decree. The oil workers took a time out, but after the situation was clarified, pumping continued.

Kirill MELNIKOV