Russia is preparing for lower oil prices. Will reduce the Welfare Fund

Russia is considering changing the budget rule in connection with a decrease in oil prices – Bloomberg said on Tuesday. According to the Kremlin agency, the prices will be lower for a long time, while war expenses will continue to deplete state money.

When constructing this year's budget, Russia assumed that the oil price would be $ 60 per barrel. According to Bloomberg's informants, the Kremlin is thinking about lowering the assumptions from $ 60 to $ 50 per barrel. Discussions on this subject are at an early stage, and any decisions would require cuts of expenses.

If the prices of raw material exceed the amount assumed in the budget, then the surplus are directed to the so -called National Fund of Probability. As Bloomberg explains, this is a type of insurance: in the event of a drop in prices, the government pays money from the fund, compensating for lower prices.

Income from fuel exports accounts for 30 percent. Russia's budget.

The Welfare Fund – reminded the agency – has already been significantly depleted due to the financing of war by the Kremlin in Ukraine. At the beginning of 2022 there were 8.4 trillions of rubles, currently 3.3 trillions ($ 42 billion).

On Saturday, a group of oil producing OPEC+ countries decided to move away from the strategy of supporting oil prices by limiting extraction. This plan was also supported by Russia, hoping that thanks to increasing production it will be able to at least partially compensate for the decrease in income. (PAP)

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