The Russian Finance Ministry said it would boost taxes on natural gas extraction by 61% as it works toward balancing the budget, a blow to the powerful Kremlin-connected industry and OAO Gazprom (GAZP.RS), the world's biggest gas producer.

An increase in the extraction tax on gas could hamper Gazprom's ability to realize an ambitious investment plan that includes the Nord Stream pipeline through the Baltic Sea and development of the Arctic Yamal Peninsula --projects considered of strategic importance by the state.

The mineral extraction tax on natural gas may be increased by 61% in 2011, and by another 6% and 5.4% in 2012 and 2013, respectively, Deputy Finance Minister Ilya Trunin said. The hike, which would be the first since 2005, has been agreed by all involved ministries and will be discussed in the government next week, he said.

Gazprom, which produces around 80% of Russia 's gas output, has so far been able to fight off tax hikes, arguing it needs cash to fund its investment plan. Gazprom said its board had considered a possible tax increase at a meeting Tuesday, but declined to give details.

At 1212 GMT, Gazprom's stock was trading 2.3% higher at RUB159 on Moscow 's Micex index, in line with the overall market.

Analysts at UralSib said a tax increase may already be priced in by investors. A 61% hike would result in a 3% decrease in Gazprom's earnings before interest, taxes, depreciation and amortization, or Ebitda, which is expected around $45 billion, UralSib said.

"But I still think the actual increase will be lower, possibly in the range of 15% to 25%," said UralSib analyst Viktor Mishnyakov.

Russia is struggling to close a budget deficit that reached 5.9% of gross domestic product last year, amid the country's first recession in more than a decade.

Last month, the government reinstated an export duty on East Siberian crude oil, following pressure from the finance ministry to find additional funds for the budget. Oil produced in the region had been exempt from export duties since the beginning of 2010 in order to stimulate investments in the region.

The proposal to hike taxes for the gas industry has been discussed in the government for several years, but has met resistance due Gazprom's high capital spending requirements.

Finance Minister Alexei Kudrin said last month that Russia may raise the equivalent of 0.5% of gross domestic product from the gas industry.

Should the higher tax become reality, Gazprom could also seek to raise debt as it looks to fund a 2010 investment program of around $28 billion, UralSib's Mishnyakov said.

Διαβάστε ακόμα