OREANDA-NEWS  The statement by Russian Finance Minister Anton Siluanov about the irrelevance of the current cut-off price in the budget rule, set at $ 60 per barrel, and the need to adjust it suggests that the government is preparing to reduce oil revenues. Vedomosti writes about this.

During a speech at the expanded board of the department, the official stressed that, given the unfolding trade wars in the world, which directly affect energy exports, special attention should be paid to the sustainability of public finances. In particular, it is necessary to bring the liquid assets of the National Welfare Fund (NWF) to the possibility of "three years of uninterrupted financing of expenditure obligations in the event of a stressful development of the situation in the oil market."

The budget rule was introduced in Russia in order to avoid the impact of fluctuations in the oil market on the domestic economy. It implies that during a period of high prices, excess profits are sent to the NWF, and when the cost of raw materials is low, the shortfall in budget revenues is compensated from the fund. The cut-off price is precisely the boundary separating savings and spending.

Dmitry Kulikov, senior director of the ACRA group of sovereign and regional ratings, suggested that if the Ministry of Finance wants to keep the NWF at the current level, then the cut-off price should be lowered to $ 55 per barrel. If, as Siluanov says, they want to increase the size of the fund, then it should be increased to $ 50.