Russia's Jan budget deficit widens as energy revenues slump

Slumping energy revenues and soaring expenditure pushed Russia's federal budget to a deficit of 1.76 trillion roubles ($24.78 billion) in January, the finance ministry said on Monday, citing preliminary data. Oil and gas revenues were 46.4% lower at 426 billion roubles in January than in the same month last year, which the ministry said was primarily due to lower prices for Russia's Urals blend and lower volumes of natural gas exports.

Slumping energy revenues and soaring expenditure pushed Russia's federal budget to a deficit of 1.76 trillion roubles ($24.78 billion) in January, the finance ministry said on Monday, citing preliminary data.

Oil and gas revenues were 46.4% lower at 426 billion roubles in January than in the same month last year, which the ministry said was primarily due to lower prices for Russia's Urals blend and lower volumes of natural gas exports. Overall, budget revenues for the month were down 35.1%, while spending was 58.7% higher in January 2023, at 3.12 trillion roubles.

Moscow relies on income from oil and gas - last year around 11.6 trillion roubles - to fund its budget spending, and has been forced to start selling international reserves to cover a deficit stretched by the cost of the Ukraine conflict. While some Russian officials have sought to downplay the efficacy of price caps and embargoes on Russian energy exports, Finance Minister Anton Siluanov said last year that a price ceiling on Russian oil could widen the budget deficit in 2023.

The average price of Russian Urals oil in January was $49.48 a barrel, down 42% on January 2022, the finance ministry has said. "Given the decreased representativeness of the Urals oil price as an objective price indicator for export prices of Russian oil at the present time, approaches to switching to an alternative price indicator for tax purposes are currently being studied," the ministry said in a statement on Monday. ($1 = 71.0320 roubles)

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