Russia to cut tariffs if China-bound oil exceeds 5 mln tons

Russian Railways said Thursday it is ready to cut tariffs on oil shipment to China in 2005, if the transport volume exceeds 5 million tons.

Russian Railways' revenue calculation is based on 5 million tons of oil supplies to China and the company is ready to provide a discount if supplies exceed the planned minimum, its vice president, Salman Babayev, told the Interfax news agency.

The current price stands at 72 US dollars for each ton of oil transported from the Irkutsk region to the Chinese border.

If the volume reaches 10 million tons, the cost will be brought down to 63 dollars with cuts in tariffs, which could be halved if the volume hits 15 million tons, Babayev said, adding the lowering of tariffs will apply to all oil companies.