Kazakhstan to increase state control over the turnover of petroleum products

/IRBIS, Jan.27, 00/ - REUTERS informs, with the reference to the director of the non-production payments department of the Ministry for state revenues Dauletkhan Baimurzin, that the government of Kazakhstan intends to shift part of excise tax from oil refineries to gas stations, therefore a program of state regulation of petroleum products turnover has been prepared. "The program provides for step by step shift of the excise from oil refineries to retail sales", he said. He said the project of the resolution was sent to the government. Previously, KZT5 th. excise was paid by oil refineries per ton of gasoline, and now the Ministry suggests that KZT4.5 th. to be paid by the refineries and KZT500 by gas stations. Excise on diesel fuel is to be split in following proportions: KZT540 per ton paid by refineries and KZT60 by wholesale-retail sellers. Currently, excise is KZT600 per ton paid by the refineries. He believes these steps will expand tax basis, since gas stations sell not only official shipments of gasoline, but also they sell illegal gasoline. If adopted, the project will go into effect from February 1. Retail sales account for most of illegal turnover of petroleum products without paying excise taxes, said the director. This amount is to be recovered by implementing this project, he said. He also added the government planned to collect more than KZT9 bln through the excise taxes this year. Last year this figure reached about KZT7.7 bln with KZT11 bln planned. It is offered to restore excises on gasoline imports at 133 euro per ton, and 88 euros per ton of diesel fuel. These taxes were cancelled on August 11 of last year due to the harvesting. Baimurzin said the program provided for restoration of excises on gasoline and diesel fuel, and that their prices has almost doubled due to unbalanced system of petroleum products turnover. He also said the program offered a complex approach by setting oil exports quota (Kazakhstan limited oil exports to 22 mln tons in 2000) and using excises on imports and production, and registration-permission policy towards wholesale-retail sellers of petroleum products. He believes proportioning of the excise among oil refineries and gas stations will not increase gasoline and diesel fuel prices. "Meetings were held with refineries and the Oil union, joint statement is being signed that decrease in excise tax burden on plants will not be used to increase selling price of their products and therefore it should not cause retail prices to jump", he said. "If it happens somewhere then it is dishonorable behavior of separate entities, which want to speculate in such situations. But I believe the market will make its own corrections", he added. Up to 9.5 mln tons of oil a year is needed to load three Kazakhstani refineries to their full capacities. Last year production of gasoline reached 1.3 mln tons (25.1% decrease to 1998) and fuel oil 2.1 mln tons (30.1% decrease). He said this program has been approved by the government as far back as in December of last year, but for the project to work it should be ratified.