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MOSCOW, Aug 19 (Reuters) – Russia’s oil pipeline monopoly Transneft may raise transport tariffs from 2012 due to Finance Ministry plans to abolish its exemption from paying property taxes, the company spokesman said on Thursday.

The Russian Finance Ministry proposed a bill earlier this week that would make natural monopolies including Transneft and the state-owned gas producer Gazprom start paying taxes on infrastructural property beginning in 2012.

“To pay these taxes we will have to colossally increase our pipeline transit tariffs,” Transneft spokesman Igor Demin told Reuters.

Transneft, which profits solely from oil shipment fees, will raise tariffs by 9.9 percent from December, and had considered cutting tariffs in 2011 once it finished large construction projects, including a pipeline to the Baltic Sea [ID:nLDE66S15L].

“This will no longer be possible because we will have to find a way to pay taxes on our property, and the tax burden will only increase as we finish new projects,” said Demin.

A source in the Federal Tariffs Service (FTS), which sets the oil transport fees for Transneft, told Reuters that the introduction of a property tax could result in a tariff rise of around 10 percent.

Oil companies say tariff hikes hinder development of new deposits and substantially increase costs.