The Ministry of Energy of the Russian Federation will consider the idea of removing electricity from the export duty

There is no final decision on the removal of electricity from the flexible export duty.Work is underway taking into account the fact that the Inter RAO company has reached an agreement with its counterparties, Nikolai Shulginov, head of the Russian Ministry of Energy, told reporters.

“The final decision has not been made. So far, the work is proceeding taking into account the fact that the company has agreed with its counterparties,” he said on the sidelines of the exhibition of the Ministry of Energy of the Russian Federation “Energy of Life” as part of the International Exhibition and Forum “Russia” at VDNKh.

Inter RAO representative Alexandra Panina told reporters in September that the company was considering the possibility of asking the government to exclude energy from the list of goods subject to export duties. The Ministry of Energy of the Russian Federation supported this initiative.

Later, in an interview with RIA Novosti, Deputy Minister of Finance Alexey Sazanov said that the Ministry of Finance had received a request from Inter RAO about removing electricity from the flexible export duty and was studying the economy and contracts.

The Russian government introduced flexible export duties linked to the ruble exchange rate from October 1 until the end of 2024 to protect the domestic market. In particular, the export of electricity to non-CIS countries was subject to a flexible duty. The flexible duty ranges from 4% to 7% depending on the national currency exchange rate. So, at an exchange rate of 80 to 85 rubles per dollar, the duty will be 4%, at an exchange rate of 85-90 rubles - 4.5%, at a dollar above 90 rubles and below 95 rubles - 5.5%. The highest duty of 7% will be applied at an exchange rate above 95 rubles. When the exchange rate is below 80 rubles, the flexible duty is reset to zero.

Against the backdrop of the introduction of such a duty, Inter RAO at the end of September proposed to its counterparties who are not members of the EAEU to increase the cost of exported electricity by 7% from October 1, otherwise the company will be forced to limit or completely stop supplies. Alexandra Panina explained that we were talking about China, Mongolia, Azerbaijan, and South Ossetia. The company later reported that it had agreed with Mongolia and China to increase the price of electricity exports by 7% from October. According to Alexandra Panina, the increase in the price of electricity for China will not change the profitability of Inter RAO; money from sales will go to the budget.