Russian oil tax shift will affect domestic market

2019 ◽  
Keyword(s):  
Value Added ◽  
Price Volatility ◽  
Tax Rates ◽  
The Urals ◽  
Content Type ◽  
Fuel Prices ◽  
Oil Price Volatility ◽  
Export Tax ◽  
Oil Sector ◽  
Excise Duties

Subject Russia's 'tax manoeuvre' in the oil sector. Significance Legislation in force since January 1 will see a reduction in export duties on oil from 30% to 25% this year and down to zero by 2024. The Mineral Extraction Tax (MET) levied on hydrocarbons upstream will increase at the same pace over the period to replace budget revenues. Impacts International oil price volatility remains a key risk; MET and export tax rates are directly linked to the Urals price. Retail fuel prices are under additional upward pressure with January's rise from 18% to 20% in value-added tax. Belarus's oil imports for its refineries have been exempt from Russian excise duties, but higher MET will raise prices. Russia is already using the higher price to pressure Belarus.

Brazil's reliance on foreign oil investment will rise

2019 ◽  
Keyword(s):  
Price Volatility ◽  
International Markets ◽  
Political Resistance ◽  
Content Type ◽  
Oil Price Volatility ◽  
Salt Layer ◽  
Oil Sector ◽  
New Policies ◽  
Oil Company ◽  
Domestic Fuel

Subject Brazilian oil sector outlook. Significance The difficult challenges faced by state-controlled oil company Petrobras in recent years have opened up space for new policies towards foreign investors. Key global producers have benefited from recent pre-salt layer auctions and oil concessions. These policies are likely to continue under the administration of new President Jair Bolsonaro. Impacts Political resistance and the priority assigned to other reforms will make a Petrobras privatisation unlikely. Revenues from pre-salt auctions and foreign participation are set to increase. Oil price volatility in international markets will generate unstable domestic fuel pricing for final consumers.

Angolan government will point to early reform progress

2019 ◽  
Keyword(s):  
Interest Rate ◽  
Agricultural Production ◽  
Value Added ◽  
Fiscal Consolidation ◽  
Content Type ◽  
Fuel Distribution ◽  
Oil Sector ◽  
Near Term ◽  
State Relations ◽  
The Imf

Significance The underperformance of the oil sector, coupled with a recent fuel distribution crisis, have combined to dampen growth forecasts for 2019. While President Joao Lourenco’s government has earned praise for recent fiscal consolidation efforts, economic frailties linger. Impacts The Angolan authorities will accelerate efforts to repay arrears to Portuguese companies amid improving state relations. A potential inflationary spike once value added taxation (VAT) is introduced may lessen the chance of an interest rate cut in the near term. Improving agricultural production will be a major diversification priority and agricultural spending has quadrupled in the revised budget. The IMF will maintain pressure on Luanda to reduce subsidies in sectors such as agriculture and fisheries.

Oil price volatility and firm profitability: an empirical analysis of Shariah-compliant and non-Shariah-compliant firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdullah Bugshan ◽  
Walid Bakry ◽  
Yongqing Li
Keyword(s):  
Firm Performance ◽  
Fixed Effects ◽  
Price Volatility ◽  
Oil Price ◽  
Bankruptcy Risk ◽  
Content Type ◽  
Financial Firms ◽  
Oil Price Volatility ◽  
Firm Profitability ◽  
The Impact

PurposeThis study examines the impact of oil price volatility on firm profitability. As Shariah-compliant firms operate under restrictions, the study also explores whether oil price volatility affects Shariah-compliant firms differently from their non-Shariah-compliant counterparts.Design/methodology/approachThe study sample includes all non-financial firms listed on Gulf Cooperation Council stock exchanges from 2005 to 2019. In evaluating the oil price volatility–profitability relationship, static (panel fixed effects) and dynamic (system generalised method of moments) models were used.FindingsOil price volatility significantly depresses firm profitability. In addition, Shariah-compliant firms are more significantly affected by oil price volatility than their non-Shariah-compliant peers. The results suggest that high oil price volatility exposes Shariah-compliant firms to higher bankruptcy risk than non-Shariah-compliant firms and that positive and negative oil price shocks have asymmetric effects on firm performance.Research limitations/implicationsThe findings of the paper call for more economic diversification by supporting non-oil sectors in the region and raise the need for more development of Islam-compliant products that compete with traditional instruments to help Shariah-compliant firms cope with uncertainty. Moreover, managers need to prepare quick alert and response procedures to reduce the negative impacts of oil price volatility on profitability.Originality/valueTo the best of the authors’ knowledge, this study is the first to explore the relationship between oil price volatility and profitability of non-financial firms. Further, the study extends prior Islamic corporate finance literature by enhancing the understanding of how Islamic corporate decisions affect firm performance during instability.

scholarly journals Governance of public spending avenues by oil prices, oil revenues, and GDP in Saudi Arabia: proportionate sensitivity and trend analysis

2020 ◽  
Vol 17 (4) ◽  
pp. 152-164
Author(s):  
Anis Ali
Keyword(s):  
Saudi Arabia ◽  
Public Spending ◽  
Price Volatility ◽  
Secondary Data ◽  
Oil Prices ◽  
Saudi Arabian ◽  
Oil Price Volatility ◽  
Short Run ◽  
Oil Sector ◽  
The Impact

Saudi Arabia is a petroleum resource-rich country, and half of the GDP of Saudi Arabia is based on the Oil Sector Revenue (OSR). The OSR is governed by the Oil Prices (OP), while GDP is also affected by the OSR in petroleum exporting companies. The volatility of OP governs the OSR and GDP positively and perfectly as the oil sector contributes approximately half of the GDP of Saudi Arabia. The study analyzes the governance of the Public Spending Avenues (PSA) by the OP, OSR, and GDP in the long and short run and based on the secondary data taken from the website of the Saudi Arabian Monetary Authority (SAMA). Coefficient of Variations (CV), Chain-based Index (CBI) numbers, Fixed-based Index (FBI) numbers, and Analysis of Variances (ANOVA) of OP and other dependent variables calculated to get the normality, sensitivity, trend, and significance difference among the sensitivity and trend of variables, while Pearson’s correlations establish the cause-effect relationship among the variables. The study reveals that oil price volatility does not affect the OSR, GDP, and ultimately public spending in the long run. However, there is governance of volatility of OP that can be seen on OSR, GDP, and ultimately on PSA in the short run. Saudi Arabian government enhances its spending on PSA and especially on education while lowering the OP. There is a need to diversify the income resources to minimize the reliability of oil prices and budget deficit and consider the sensitivity of oil prices on the economy by the policymakers to formulate the policies to minimize the impact of volatility of OP on the economy. AcknowledgmentThe author would like to thank the Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Saudi Arabia.  

South African budget may ease downgrade fears

2018 ◽  
Keyword(s):  
Higher Education ◽  
South African ◽  
Value Added ◽  
Tax Revenue ◽  
Luxury Goods ◽  
Content Type ◽  
Debt Burden ◽  
The Government ◽  
First Time ◽  
Excise Duties

Significance The first budget since new President Cyril Ramaphosa election by parliament last week, it outlines the National Treasury’s response to a 48.2-billion-rand (4.2 billion dollars) tax revenue shortfall for 2017/18. The government has raised the rate of value-added tax (VAT) for the first time since 1993, while committing to free higher education for students from poorer and working-class families, and to tackling the debt burden. Impacts Increased excise duties on luxury goods will slow demand for these items, while an increased fuel levy will drive consumer goods inflation. Reduced infrastructure spending at the provincial level could hamper service delivery. Ongoing public sector wage talks could increase pressure on budgetary targets.

Flights of fancy

2015 ◽  
Vol 31 (2) ◽  
pp. 22-24 ◽  
Keyword(s):  
Design Methodology ◽  
Price Volatility ◽  
Economic Consequences ◽  
Way Of Life ◽  
Content Type ◽  
Competitive Edge ◽  
Oil Price Volatility ◽  
Pertinent Information ◽  
Fierce Competition ◽  
Practical Implications

Purpose – This paper aims to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies. Design/methodology/approach – This briefing is prepared by an independent writer who adds their own impartial comments and places the articles in context. Findings – Fierce competition is an unfortunate way of life in the world of business. It is obviously more intense in some industries than in others. One such sector is aviation. It does not matter whether the company is a budget carrier or the company is one marketed as full service. Securing a competitive edge is tough either way. The aviation sector is more vulnerable than most to the economic consequences of oil price volatility. That hardly helps the situation. Fuel accounts for around 40 per cent of the costs of running an airline, and profits invariably take a sizeable hit when prices are high; like in 2012, when oil soared to over $100 per barrel. Practical implications – The paper provides strategic insights and practical thinking that have influenced some of the world’s leading organizations. Originality/value – The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Modeling and forecasting oil price risk: the role of implied volatility index

2017 ◽  
Vol 44 (6) ◽  
pp. 1003-1016 ◽  
Author(s):  
Anupam Dutta
Keyword(s):  
Crude Oil ◽  
Information Content ◽  
Price Volatility ◽  
Oil Price ◽  
Base Line ◽  
Content Type ◽  
Oil Market ◽  
Oil Price Volatility ◽  
Volatility Index ◽  
The Us

Purpose While numerous empirical studies have tried to model and forecast the oil price volatility over the years, such attempts using the crude oil volatility index (OVX) rarely exist. In order to conceal this void, the purpose of this paper is to investigate whether including OVX in the realized volatility (RV) models improve the accuracy of predictions. Design/methodology/approach At the empirical stage, the authors employ several measures to frame the RV of crude oil futures returns. In particular, the authors use three different range-based RV estimators recommended by Parkinson (1980), Rogers and Satchell (1991) and Alizadeh et al. (2002), respectively. Findings The findings reveal that the information content of crude OVX helps to provide more accurate volatility predictions in comparison to the base-line RV model which contains only historical oil volatilities. Besides, the forecast encompassing test further suggests that the modified RV model (when OVX is introduced in the base-line RV model) forecast encompasses the conventional RV forecast in majority of the cases. Practical implications Since forecasting oil price volatility plays a vital role in portfolio optimization, derivatives pricing, optimum asset allocation decisions and risk management, the findings of this study thus carry important implications for energy economists, investors and policymakers. Originality/value This paper adds to the existing literature, since it is one of the initial studies to explore whether OVX is informative about the realized variance of the US oil market returns. The findings recommend that the information content of oil implied volatilities should be taken into account when modeling the US oil market volatility. In addition, range-based measures should be utilized while estimating the RV.

Fuel subsidy in Nigeria: contexts of governance and social protest

2014 ◽  
Vol 34 (1/2) ◽  
pp. 88-106 ◽  
Author(s):  
Olayinka Akanle ◽  
Kudus Adebayo ◽  
Olorunlana Adetayo
Keyword(s):  
Social Services ◽  
Design Methodology ◽  
Social Protest ◽  
Content Type ◽  
Income Gap ◽  
Fuel Prices ◽  
Major Mechanism ◽  
Civil Society Organisations ◽  
Oil Sector ◽  
The Government

Purpose – Fuel subsidy removal has become a recurring issue in Nigeria. Successive governments in the country have interfaced with this issue as they attempted to reform the economy and the petroleum downstream to reduce corruption and waste and make the sector more effective. Importantly however, fuel subsidy removals have always met opposition from the citizens and civil society organisations. The remit of this article is to bring original and current perspectives into the issue and trajectories of fuel subsidy, which has become a major problem in Nigeria's development struggles. Previous works were dated and did not capture most recent popular uprising. The paper aims to discuss these issues. Design/methodology/approach – Purely primary, empirica and normative with primary insight. Findings – A major mechanism that must be put in place is popular and unpoliticized anti-corruption mechanisms and networks especially to sanitize the oil sector in the minimum. Also, government must demonstrate transparency and accountability across sectors and spending including at the government house. Sufficient palliatives like public transport and dedicated social services for the really poor is important before subsidy is implemented. Until these are done, government's intention to successfully Remove Subsidy For Development (RS4D) may be a mirage! Research limitations/implications – This paper presents details of an international work with evolving issues. Originality/value – The paper argues that subsidy removal that will lead to high fuel prices appears unjustified given the wide income gap between workers in Nigeria and those in other oil-producing nations.

Further insights into the oil and equity market relationship

2019 ◽  
Vol 36 (2) ◽  
pp. 291-310 ◽  
Author(s):  
Olfa Belhassine ◽  
Amira Ben Bouzid
Keyword(s):  
Stock Market ◽  
Price Volatility ◽  
Oil Price ◽  
Subprime Crisis ◽  
Oil Price Shocks ◽  
Price Shocks ◽  
Content Type ◽  
Asymmetric Effects ◽  
Oil Price Volatility ◽  
The Impact

Purpose This paper aims to assess the asymmetric effects of oil price shocks and the impact of oil price volatility on the Eurozone’s supersector returns, with a particular emphasis on the impact of the subprime crisis and the euro debt crisis (EDC) on this relationship. Design/methodology/approach Empirical data consist of daily observations of the 19 EURO STOXX supersector indices and the Brent crude oil price index for the period January 2001 to August 2015. This paper uses a non-linear multifactor market model. This model accounts for heteroscedasticity and breakpoints that are identified by the Bai and Perron (1998, 2003) tests. Findings The results show that supersector returns are sensitive to oil price shocks. However, in most cases, their responsiveness to oil price volatility is not significant. The relationship between oil price shocks and supersector returns changes through time and depends on the sector. Financial turbulence affects the oil-stock market nexus. In most cases, the subprime crisis has had a positive impact on the oil-stock market relationship, whereas the EDC has had an overall negative effect. Before the subprime crisis, there is an evidence of asymmetric effects for some supersectors. Meanwhile, for most sectors, the asymmetric effects disappear after 2008. Originality/value The study improves understanding of the interaction between oil price risk and the Eurozone sector indices returns. Furthermore, it enables global investors to manage the risk inherent to the portfolio managers’ positions.

Digital industry talk belies Russian reliance on oil

2017 ◽  
Keyword(s):  
Foreign Investment ◽  
Oil And Gas ◽  
Digital Technologies ◽  
Price Volatility ◽  
Oil Price ◽  
Economic Recovery ◽  
Content Type ◽  
Foreign Companies ◽  
Oil Price Volatility ◽  
Economic Future

Subject The St Petersburg economic forum. Significance Digital technologies were discussed as Russia's economic future at the St Petersburg International Economic Forum (SPIEF) on June 1-3, but the bulk of commercial deals concerned the mainstay sector, oil and gas. The presence of US and other foreign companies bolstered the event's political message that Russia was not isolated despite Western sanctions. Impacts Despite greater optimism, modest economic recovery is vulnerable to oil price volatility. EU and especially US sanctions seem less likely to fall away than before, impeding foreign investment. Laws allowing the state to control the cyber sphere may dampen some investors' interest in digital sector investment.

Sign in / Sign up

Export Citation Format

Share Document