Russian Prime Minister Vladimir Putin has lifted export tariffs on liquefied petroleum gas (LPG) products for two months, retroactively from January 1.
Russian Prime Minister Vladimir Putin has lifted export tariffs on liquefied petroleum gas (LPG) products for two months, retroactively from Jan. 1, a move analysts see as helping producers such as Novatek. Putin's order, which he signed late on Thursday, imposes a zero-tariff policy on the export of propane, butane, ethylene, propylene and other liquefied gases. Domestic manufacturers of these products lobbied the government to cancel the export tariff in November.
"While the decision was no doubt sponsored by Sibur, Russia's largest LPG producer, the cancellation of export duties is also positive for Novatek," investment bank Troika Dialog said in a research note.
The bank estimated that Novatek, Russia's largest private gas company, can expect to see growth this year of between 1.5 percent and 2 percent in its earnings before interest, taxes, depreciation and amortisation (EBITDA) as a result.
The company had previously planned to lower output of its commercial propane/butane mix in the first few months of 2009 due to loss-making export conditions and over-supply on the domestic market.
The export tariff on light petroleum products, including propane/butane mix, was initially set at $92.6 per tonne as of Jan. 1, 2009.