Russia: Trade surplus widens in August
September 29, 2012
In August, exports dropped 1.0% over the same month last year to reach USD 44.1 billion. The reading marked a softer contraction compared to the 3.2% drop registered in July. Meanwhile, imports contracted 3.3% to USD 29.2 billion, contrasting July's 7.7% rise. As a result, the trade surplus widened to USD 14.9 billion in August, which represents an improvement over the USD 14.4 billion surplus registered in the same month last year. Meanwhile, the price for Ural oil - Russia's key export commodity - moderated in recent weeks, as deteriorating growth prospects curb global oil demand. On 3 October, Ural oil traded at USD 110.69 per barrel, which is 4.0% down the price reached on the same day of the previous month. However, prices for Ural oil are still up 7.8% on a year-to-date basis. If the lower trend persists, export revenues would be negatively affected in the coming months. Against this backdrop, the Russian government is studying a reduction in the export tax duty for companies extracting oil in more remote oil fields in Eastern Siberia and in the country's far north, in order to boost crude production and increase revenue for the state coffers. On 24 September, Energy Minister Alexander Novak stated that the government would provide a 45% discount on export duties for certain levels of production in the aforementioned regions. The government will discuss the approval of the tax breaks at a meeting in November.
Author: Armando Ciccarelli, Head of Data Solutions