Belnautakhim: Belarusian Refineries' Losses Will Double This Year

This is associated with the prices of Russian oil.

The Belnautakhim concern predicts a two-fold increase in financial losses of the Belarusian refineries in 2020 compared to 2019 because of the implementation of tax maneuver in the Russian oil sector, interfax.by reports.

"In 2020, the losses of the Belarusian refineries caused by the cost of raw materials because of the tax maneuver will be twice as large as in 2019 (with comparable oil quotations)," - head of the Planning and Economic Department of the concern Hanna Huryna said in an interview with the corporate magazine, Vestnik Belnautakhima.

She stated that as a result of the maneuver and compensatory measures for Russian refineries, the cost of motor fuel in Russia is already 10-13% lower than in Belarus. "Russian refineries are able to maintain efficiency through appropriate payments of the back excise tax from the budget, compensating for the cost of raw materials, and the damping factor, which allows to restrain prices in the domestic market. As a result, the difference in retail fuel prices in Belarus and Russia is now about 10-13%," - Huryna said.

At the same time, under the current circumstances, "according to the forecast for 2020, the cost of oil in the production cost of petroleum products will be at least 87% in Belarus".

A number of measures to compensate for the cost of raw materials is being taken by the concern. "During 2019, the concern and the refineries worked out a strategy of operating under the conditions of tax maneuver, the main components of which are the completion of the launched investment projects in order to increase the output of light oil products, work on improving operational efficiency, optimization of the production workload and sales efficiency," - Huryna said.

According to her estimates, in 2020 the economic effect from implementing cost-cutting measures by oil refining enterprises will amount to $36 million.

Meanwhile, "the internal measures are a priority for producers, but they do not fully compensate the negative effect of changes in external conditions," - the Belnautakhim representative stressed.

According to her, further growth in domestic prices of petroleum products is inevitable. "In order to create conditions for completing modernization and maintaining the financial stability of the refineries, the measures for 2020 also provide for adjusting the prices of petroleum products, taking into account changes in the cost of petroleum raw materials and other pricing factors," - Huryna said.

She also noted that under the current conditions it is planned to ensure the profitability of sales at the level of 5.2% for the whole concern, with the target of export growth by 15.4% in 2020. "The concern understands the need to make the maximum contribution to the gross domestic product of Belarus. Despite the current difficult external conditions, the organizations' target goals for 2020 have been formed with the maximum effect," - the specialist added.

According to her, in order to implement the approved plans, a number of measures should be taken at the government level. "The measures, which require decisions at the government level, have already been considered by the concerned government agencies," - Huryna said.