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Russia Forecasts $1.5Bln Shortage in Excess Oil and Gas Revenue

Igor Ivanko / Moskva News Agency

Russia’s additional oil and gas revenues will fall short 113.6 billion rubles ($1.4 billion) below expectations in April, the Finance Ministry said Wednesday.

The difference between expected oil and gas revenues and those received as of March totaled 39 billion rubles ($490 million), it said.

To cover the expected shortage, Russia’s Finance Ministry uses a budget rule that diverts excess oil revenues into the National Wealth Fund and buys foreign currency to replenish state reserves.

The Finance Ministry said it will sell 74.6 billion rubles ($940 million) worth of foreign currency over the next month, or 3.7 billion rubles per day between April 7-May 5.

Russia’s Central Bank resumed foreign currency interventions with the sale of Chinese yuan in mid-January almost a year after suspending them due to the economic fallout from the invasion of Ukraine.

Russia’s January-February oil and gas revenues fell 46% to 947 billion rubles ($11.8 billion) over declining Urals blend prices and lower gas exports. Non-oil and gas revenues decreased by 9% to 2.217 trillion rubles ($27.7 billion) due to reduced income tax receipts.

Urals oil is currently trading at around $60 a barrel, while Russia’s 2023 budget is based on the price of Urals at $70.1 a barrel.

Russia’s January-February budget deficit totaled 2.581 trillion rubles ($32.2 billion) with spending seeing a 50% increase to 5.744 trillion rubles ($71.7 billion).

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