Report: Tough budget steps loom for Russia if oil falls to $20

MOSCOW, Jan 29 (PRIME) -- Russia will have to take difficult budgetary measures if oil prices fall to U.S. $20 per barrel, First Deputy Energy Minister Alexei Teksler told channel RBC-TV in an interview broadcast late Thursday.

“If oil is $20 per barrel, the (oil tax) contributions to the budget will fall to an extent where I think, certain steps can be made and they can be tough for the budget. Sure, we hope that this will not happen,” Teksler said.

The budget will receive about $4 per barrel taxes on average if oil prices fall to $20, whereas when the price is $30, the tax contributions make $12–13 per barrel. If oil price rebounds to $50, the government will receive $30–31 a barrel, Teksler said.

He said that Russian costs of oil production and transportation amount to $15–16 per barrel, meaning that companies will survive this price level but will “no longer think about investments.”

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