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. Last Updated: 07/27/2016

Decision to Hike Gas Tax Faces Delay

The government may put back a decision on whether to raise taxes on gas production, Industry and Energy Minister Viktor Khristenko said Friday.

"On the question of a possible increase in taxation, we'll probably have to come back to that toward the end of the year," Khristenko told reporters.

The government's mineral-extraction tax on gas producers has not changed over the past five years and is set at 147 rubles ($5.65) per 1,000 cubic meters, a small fraction of the tax on oil producers. Gazprom says it needs to save money on taxes to invest more in gas production.

The government will gradually switch to long-term gas supply deals at market prices from the current quota supplies at state-capped prices, and Khristenko said it would need to see how the new system worked before setting new gas taxes.

Some analysts have predicted the mineral-extraction tax on gas will be about 250 rubles per 1,000 cubic meters.