Russia preparing to tighten fiscal rule again amid oil and gas revenue shortfall - Siluanov

MOSCOW. Feb 25 (Interfax) - Russia is preparing to tighten its fiscal rule again amid an oil and gas revenue shortfall.

"Oil and gas revenue really is falling [as a share of overall budget revenue]. We see this and the Russian government is thinking of tightening the fiscal rule by lowering the cut-off price to keep the National Wealth Fund intact and to ease pressure on the currency market," Finance Minister Anton Siluanov told reporters following the government's report to the State Duma.

"This year, we see the need the need to do this fairly promptly, and for the next three years. I think we will look at and adopt such decisions fairly quickly," he said, without detailing the plans to tighten the fiscal rule.

"The main parameters for adjusting the fiscal rule are ready. I believe the government will make such decisions within a couple of weeks," Siluanov said.

The government decided last year to gradually reduce the cut-off price for oil in the fiscal rule by $1 per year, from $60 per barrel to $55 by 2030.

The Finance Ministry does not currently see any need to further review the budget structure and this issue may only be discussed if reasons arise to believe that the equilibrium price in the medium term will lower than the planned cut-off price, Deputy Finance Minister Vladimir Kolychev said in January this year.

"The start of the year turned out interesting, and the end of last year also. Oil prices, indeed, are significantly lower than our base cut-offs. And in principle this indicates that the government made the decision in time that we need to gradually lower the cut-off," Kolychev told reporters.

"If the situation develops somehow differently, according to an even more conservative scenario than we anticipate, some additional discussion of the budget structure might be required," Kolychev said.

Russian Prime Minister Mikhail Mishustin said during the government report that he had held a lengthy meeting attended by Russian President Vladimir Putin at which approaches to financing the federal budget deficit were discussed.

"With regard to the choice - of how to fund the federal budget deficit which is emerging - you know, we discussed a very large number of approaches with the president and many members of government, with Elvira Sakhipzadovna [CBR Governor Nabiullina] participating, and colleagues, until late last night. I think we were in discussions with the president for many, many hours, all of us - about how to choose the best solution for the country," Mishustin said.

"If there is a choice on how to fund the emerging budget deficit, this issue will, of course, relate to monetary policy matters, and in this sense we will then need to coordinate these approaches with the Bank of Russia," he said, without going into detail - this was not a public meeting and had not been announced in advance.

The Russian federal budget had a January 2026 deficit of 1.72 trillion rubles or 0.7% of GDP according to preliminary estimates, the Finance Ministry has said. The planned federal budget deficit for the year is 3.786 trillion rubles or 1.6% of GDP. Budget revenue fell 11.6% year-on-year in January to 2.362 trillion rubles. Oil and gas revenues halved compared to the same period last year, to 393 billion rubles, as oil prices fell. They were also lower than baseline oil and gas revenues, which are 576 billion rubles. Therefore, in keeping with fiscal rules, National Wealth Fund money equal to the oil and gas revenue shortfall was used to finance the deficit.

It has become commonplace in recent years to gradually increase the current year's budget deficit forecast as the budget is implemented. This increased from the initially planned 0.5% to 2.6% of GDP in 2025. Judging by what Siluanov said, the Finance Ministry believes this year will be no exception.

"The figures might adjusted slightly, given the external environment," Siluanov said in an interview with the Rossiya-24 television channel. He did not say how much the 2026 budget deficit forecast might increase from the current 1.6% of GDP.