Finance Minister says ministry to soften budget rule gradually

MOSCOW, Jul 9 (PRIME) -- Russia’s Finance Ministry plans to soften the budget rule which sends windfall revenue from oil and gas sales to state reserves, Finance Minister Anton Siluanov told the State Duma, parliament’s lower house, on Monday.

“The question is which is better -- to raise (value added) tax or the (budget rule) cut-off price… In fact, we are moving in the direction (of softening the budget rule)… The cut-off price of U.S. $45 per barrel is planned for 2023… we adjust the price every two years,” he said.

The current cut-off price under the budget rule is $40 per barrel.

Siluanov also warned against a prompt softening of the policy as it may lead to severe financial market volatility.

Head of the Audit Chamber Alexei Kudrin said earlier on Monday that an increase of the cut-off oil price under the budget rule to $45 per barrel could delay an increase of value-added tax for six years.

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