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    Russia needs oil taxation reform - minister

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    MOSCOW, August 4 (RIA Novosti) - Russia needs to reform oil taxation by the end of the year, Russian Trade and Economic Development Minister German Gref told a Cabinet session Thursday.

    "By the end of the year, we need to make a comprehensive decision on taxation to prevent further stagnation in oil production," the minister said.

    Gref said the changes would target severance taxes and export tariffs.

    The minister also said the greater part of revenues earned due to increasing oil prices had accumulated in the Stabilization Fund, while oil companies had obtained only 14% of this revenue.

    "It affects investment capabilities and the current financial condition of oil companies," Gref said, adding that it led to a drop in oil production and exports.

    Oil production in Russia in the first half of the year grew 2.7% compared with the same period last year, whereas oil exports grew only 0.5 % year-on-year.

    However, the minister said Russian production of refined items grew by 34%, compared to 12% last year, the first significant growth since 1999, with oil-products supply for the domestic market increasing along with exports.

    The ministry forecasts oil production of 470-474 million metric tons by the end of the year.

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