MOSCOW, May 5: Russia intends to raise extraction taxes and customs duties on natural gas, Finance Minister Alexei Kudrin said on Thursday in a move that could drastically impact the price paid on energy by Ukraine.

Kudrin told a government meeting that the hike was aimed at raising 150 billion rubles ($5.5 billion) next year as Russia moves to erase a budget deficit that reached 4.1 per cent of gross domestic product last year.

The Kommersant business daily quoted a government position paper as saying the higher customs duties would be applied to “specific foreign countries” and lead to a 30 per cent jump in the price paid by Ukraine.

Russia's western neighbour has had trouble meeting past energy payments and a pricing dispute resulted in a temporary halt in deliveries at the end of 2008 that led to brief disruption in supplies to some European countries.

Kudrin's announcement follows a government decision to revoke extraction tax exemption from several fields operated by Russia's largest oil companies.

Kommersant said the higher taxes proposal was being bitterly opposed by Russia's natural gas monopoly Gazprom and Igor Sechin the powerful deputy prime minister who oversees the energy sector.

But both Sechin and Gazprom supported the idea of raising customs duties since this would in no way affect the company's profits, Kommersant said.—AFP