The minister says the oil price required for bringing Russia’s budget into balance in 2017 amounts to $60 per barrel

Russia’s Finance Ministry will base the budget for 2018-2020 on the new budget rule (mechanism of Russia’s budget formation, determines the maximum level of spending on the basis of oil prices), Minister Anton Siluanov said on Thursday.

“Now we have a unique chance to get rid of the dependence on oil completely and thoroughly,” he said, adding that the Finance Ministry asks to support its “proposals and draw up 2018-2020 draft budget based on new (budget) rules.”

The oil price required for bringing Russia’s budget into balance in 2017 amounts to $60 per barrel, he said.

“The oil price, which brings the current account of balance of payments, totals $35-40 per barrel now, and $60 per barrel for balancing 2017 budget (at the initial level),” he said, adding that “in 2013-2014, the oil price around $95-105 per barrel was required for this.”

Earlier Siluanov said the Ministry faces a task of brining 2019 budget into balance with the oil price at $40-45 per barrel.

The government’s economic bloc expects the new budget rule (mechanism of Russia’s budget formation, determines the maximum level of spending on the basis of oil prices) to be adopted at the State Duma’s spring session, the cut-off price will remain at $40 per barrel.

The essence of the rule is to transfer additional oil and gas revenues, which are formed if the actual price of oil exceeds the target price, to the Reserve Fund. This mechanism was suspended in 2015 due to plunging oil prices.

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http://tass.com/economy/942357