Russian PM orders to sign agreement with Kazakhstan to reimburse budget losses
Azerbaijan, Baku, July 5 / Trend E. Kosolapova/
Russian Prime Minister Dmitry Medvedev ordered the Energy and Foreign Ministries to negotiate with Kazakhstan and sign an agreement to reimburse Russian budget losses for tax-free supplies to Kazakhstan, RIA Novosti reported.
"It is ordered to the Russian Energy Ministry with the participation of the Russian Foreign Ministry to conduct talks with the Kazakh side and reach an agreement to sign the protocol on behalf of the Russian Government," is said in the order, signed on June 30.
Russian budget losses will be reimbursed by duty-free supplies of Kazakh oil to Russia. Russian Rosneft and Kazakh KazMunaiGas will carry out this exchange process.
Kazakhstan produces and exports large amount of oil, meanwhile it imports some oil and oil products from Russia free of duty within the Customs Union. According to the laws of Customs Union which include Russia, Kazakhstan and Belarus, all export and customs duties are prohibited within the Common Economic Space. The need in oil supplies from Russia mainly results from specifications of the Kazakh Pavlodar petrochemical plant, which focuses on refining of West Siberian oil from Russia. Thus, its work is directly dependent on Russian oil supplies. Meanwhile, Russia restricts tax-free oil supplies to Kazakhstan due to low profitableness of such supplies.