In her interview to the Sputnik Radio Station, Natalia Kornienko, Head of the Tax System Development Department, Gaidar Institute, spoke about what producers and consumers of petrochemicals should be ready for after the working group on taxation of the oil industry was established.

Jointly with the RF Ministry of Finance, the RF Ministry of Energy will set up a group on taxation in the oil industry. The government explained that this group would facilitate both the departments to narrow their positions and motivate the fuel and energy complex (FEC).

“The working group should include representatives of the RF Ministry of Finance who deal with taxation issues in this industry, as well as officials of the relevant supervising departments who can specify some issues. Ideally, such a working group should also include business associations, too, whose interests are influenced by such reforms, for example, representatives of the Russian Union of Industrialists and Entrepreneurs and the RF Chamber of Commerce and Industry,” Natalia Kornienko says.

However, the expert believes that each reform needs a “fine tuning.”

“These are the nuances which permit the introduced fiscal mechanisms either to work efficiently or block the application of some tax legislation instruments. Suppose, the provision of reporting is relevant to scholar-bureaucrats, but unacceptable to practitioners; as a result, the reform will be distorted and never succeeds,” the expert speculates.

According to Natalia Kornienko, the RF Ministry of Energy and the RF Ministry of Finance take completely different approaches and the establishment of the group is meant for narrowing their positions.

“Such working groups have always existed, but this group was established so that both the regulators could come to terms. The agenda of the group is not known yet, but we shall learn about it somewhat later,” Natalia Kornienko believes.

Natalia Kornienko noted that the establishment of the group would not affect prices of petrochemicals.

“Any reform leads only to the appreciation of prices of gasoline, not vice versa – it is a longstanding common practice. As regards prices of petrochemicals, the organization of the working group will not affect prices. In this particular case, exchange prices and international prices are not even set in Russia. That interest which we have is beyond out jurisdiction because these are international prices and they depend on international relations,” Natalia Kornienko, expert of the Gaidar Institute concludes.