Taxation, not privatisation ahead for Russia

The collapse of the Bashneft sale means Russia's government will wring more cash from producers instead

The shelving by the Kremlin of the sale of Bashneft casts doubts about the credibility of Russia's privatisation programme and puts the spotlight back on additional taxation of the energy sector. Ministry of Finance officials had been banking on the sale of a 50% stake in the oil producer, assuming it would rake in about R300bn ($4.8bn) to cover gaps in a budget caused by lower crude prices and sanctions imposed over the Ukraine conflict. The entire privatisation programme, which kicked off in July with the sale of a stake in diamond monopoly Alrosa for $0.814bn, was supposed to bring in R1 trillion ($15bn). But the sale of shipping agency Sovcomflot has also now been postponed until next ye