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Slovak government approves proposed special tax on Russian oil

The Slovak government approved a proposal for the introduction of a special tax on Russian oil processed in Slovnaft’s refinery in Bratislava. Finance Minister Igor Matovič, leader of the major ruling party, submitted the proposal to the coalition government yesterday.

The proposed tax, which is still subject to approval in parliament, would be levied at a rate of 30 per cent on the price difference between crude oil from Russia and the price of oil from other suppliers. The special tax can enter into force on 1 June and stay until 2024.

The Slovak Finance Minister proposed to collect 280 million euros extra tax from Slovnaft citing that the company was receiving Russian oil about 30 dollars cheaper than the world market price, which means a surplus of almost 100 million euros a month.

“If this situation persists in the long run, it will generate about 280 million euros additional state revenues,” said Matovič who would like to use the surplus for social measures and to curb surging inflation in the country.

The Minister added that fuel prices will not be negatively affected citing its agreement with Slovnaft, but the oil refiner denied that it made such a promise underlining that the oil prices will be determined by the market.

The proposal comes as the EU seeks agreement between the 27 Member States to impose an embargo on Russian oil. Slovakia, heavily dependent on Russian oil coming via the Friendship pipeline, is seeking an exemption from the embargo. The country’s sole refinery is operated by Slovnaft, which is controlled by Hungary’s MOL.

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