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Russian president Vladimir Putin. Image courtesy of the Kremlin.

Russian president Vladimir Putin approved a new tax law Tuesday that will reduce oil export duties and increase taxes on mineral extraction in an effort to balance the financial needs of the oil and gas sector with the country’s budget.

Export duties on oil will be cut down by 1.7 times current levels and duties on other petroleum products will be cut down by 1.7 to 1.5 times from current levels over the next three years, Russian news agency TASS said.

Mineral extraction taxes will rise by 1.7 times from current levels for oil and spike by 6.5 times from current levels for gas condensate.

The export duty cuts will be implemented gradually to prevent domestic price spikes and limit any negative impact on industry.

Russian oil and gas companies opposed the plan when it was proposed earlier this year, fearing the mineral extraction tax hike would curb output.

Rosneft chief Igor Sechin wrote a letter to Putin in October to try to dissuade the president from passing the policy.