Belarus’ foreign trade deficit in February 2015 was mainly due to an increase in prices for Russian oil supplies and oil products. The prices have increased because of the tax manoeuver in oil refining in Russia. If oil prices for Belarus keep at their current level, additional oil costs will exceed USD 1 billion by the year-end, leading to an overall foreign trade deficit in 2015.
In February 2015, foreign trade deficit totalled USD 350.7 million. Compared with January 2015, foreign trade situation has deteriorated due to a sharp increase in Russian oil costs for Belarus, which led to an increase in oil imports cost by more than USD 200 million. In January, Belarus paid for a ton of Russian oil USD 160.9, and in February, the price went up to USD 299 per ton. That said, Belarus does not pay duties on Russian oil supplies and oil products.
The tax manoeuver implemented by Russia is regulated by government decree No 1274 of November 29th, 2014. According to the new regulation, the formula for calculating the export duty on oil has changed: export duty payments have reduced while the severance tax on oil production has increased. With the price of oil at USD 60 per barrel, the export duty on oil has decreased by USD 46/ton. In addition, export duties on light oil have been lowered – from 65% to 48% on crude oil and from 90% to 85% on petrol.
Russia has undertaken this tax manoeuvre in order to reduce her tax losses from duty-free oil supplies to Belarus and Kazakhstan. If oil prices do not change, due to reduced export duties the price of oil for Belarus would increase by the same amount. Under the new formula, with oil price at USD 60 per barrel, Belarus would have to spend additional USD 1 billion to buy 22.5 million tons of oil. Such a change dramatically reduces Belarus’ profits from ‘solvent’ schemes, when it re-exports processed Russian oil in the form of antioxidants and solvents. All in all this may lead to increased foreign trade deficit by at least USD 50 million. The tax manoeuver also makes Belarusian oil refineries less attractive for Russian companies, and they may require additional resources if they want to load their capacities independently. The cumulative negative impact from the tax manoeuver on foreign trade could reach USD 100 – USD 120 million per month. Amid overall decline in exports, Belarus is unlikely to achieve foreign trade surplus in 2015.
Due to Russia’s tax manoeuver, the price of oil and oil products supplied to Belarus in 2015 has increased significantly. Additional costs of Russian oil for Belarus may exceed USD 100 million per month, making it virtually impossible to achieve foreign trade surplus in 2015.
