Tax quirk sees Russia buy diesel from China and South Korea

Rare cargoes of diesel from China and South Korea have started to arrive in Russia due to a quirk in Russia's tax system which is making fuel shipments from abroad more profitable, data from traders and Refinitiv Eikon showed on Thursday.

Because of a local tax scheme, Russian oil firms are due to make higher payments to the government despite a slump in oil prices due to excess supplies and the economic fallout from the coronavirus pandemic.
That means the companies have little incentive to cut domestic retail prices for gasoline and diesel.
But with prices lower on the global market, that is creating an opportunity to buy in supplies from abroad at a profit.