Russia Gov't Bases 2017-2019 Draft Budget on Oil Price of $40 Per Barrel

© Sputnik / Alexander Astafyev / Go to the photo bankGovernment submits 2017-2019 draft federal budget to the State Duma
Government submits 2017-2019 draft federal budget to the State Duma - Sputnik International
Russian Finance Minister Anton Siluanov said that the Russian government took the price of $40 per barrel for budget plans for the years 2017-2019.

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MOSCOW (Sputnik) — The Russian government is basing its budget plans for the years 2017-2019 with a conservative $40 per barrel baseline scenario, Russian Finance Minister Anton Siluanov said Tuesday.

"In planning the budget, we approached with reasonably conservative estimates. When estimating revenues, we took the price of $40 per barrel and we think that this is absolutely correct. Here, we should not count on possibilities of increasing prices or their fluctuation in one direction or another. We should plan our budget and our responsibilities are independent of the economic situation abroad," Siluanov told the Russian parliament's upper house.

Oil prices may be impacted by changes to the US Federal Reserve interest rate as well as slowing global economic growth, including decreasing GDP growth rates in China, he added, stressing that the Russian government must make sure to fulfill budget plans regardless of external factors.

"We must be certain that in any economic conditions, we can fulfill the commitments stipulated in the budget… Overall, the government is ready for any changes in macroeconomic conditions," Siluanov said.

A Russian ruble coin is pictured in front of the Kremlin in in central Moscow, on November 6, 2014 - Sputnik International
Russian Government Approves 2017-2019 State Budget
Russia's government budget for 2016 was passed in late 2015 amid plunging oil prices and was based on a $50 per barrel baseline scenario. The scenario assumed a rebounding oil market which proved to be partially correct, however, prices are still hovering slightly below the mark.

Global oversupply and stagnating demand caused oil prices to plunge from $115 per barrel in June 2014 to less than $30 per barrel in January 2016. Prices then shortly began a recovery and are currently at around $45-50 per barrel.

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