The contribution of oil and gas revenues to Russia’s federal budget fell 47% in the first half, to 3.4 trillion rubles or $37.338 billion, compared to the same period in 2022, according to data published today by the Russian Ministry of Finance. According to the information on budget execution, in monthly terms in June the income from this decrease started by 26.4%, up to 528.6 billion rubles or 5.836 billion dollars compared to the previous month.
According to the department headed by Anton Siluanov, the deviation of oil and gas revenues actually received from the expected monthly volume amounted to 30.347 million rubles in June (335 million dollars). In order to compensate for the deficit, the Russian State will sell foreign currency for a total of 34,893 million rubles (385.2 million dollars) between July 7 and August 4, Finance highlights. The daily volume of currency sales will amount to the equivalent of 3.7 billion rubles.
Up to 50 million less in revenue
According to the ministry’s forecasts, in July the federal budget will receive 4.546 million rubles (50.2 million dollars) less in oil and gas revenues. Russia has calculated its budget with 70 dollars per barrel. According to the ministry, the average price of Urals crude between and January was $52.17 per barrel, compared to $84.08 in the same period of 2022. The decline in oil and gas revenues was mainly due to lower oil prices. Lower Urals and a decline in natural gas exports.
On December 5, the European Union (EU) embargo on oil from Russia by sea came into force, a measure that coincided with the imposition by the EU, the G7 and Australia of a ceiling price of 60 dollars a barrel of Russian crude. In addition, on February 5 the EU, the G7 and Australia also began to apply maximum prices to Russian petroleum products; 100 dollars per barrel for diesel and 40 dollars per barrel for other derivatives.
Russian President Vladimir Putin assured in June that Russia is gradually “disengaging” from its dependence on oil and gas revenues, and that non-hydrocarbon revenues increase by 9.1% between January and May, more than what provided.
According to the Ministry of Finance, Russia exceeded in the first four months of 2023 the budget deficit forecast for the entire fiscal year, accumulating a hole of 3.4 trillion rubles (44,987 million dollars or 40,979 million euros), especially due to the fall of oil and gas revenues.
However, Russia still has 12.7 trillion rubles or 139.875 million dollars or 8.4% of GDP in the National Wealth Fund, a kind of piggy bank for bad times, also published today by the Government. By comparison, the previous month was 12.35 trillion rubles or 8.2% of GDP.
