Russia - 03

Russia: Oil Power-Brokers Seek to Pre-Empt Tax Increases

In the coming weeks, the Russian government will lay out its plans to address the widening budget gap driven by low commodity prices. The current 2016 budget is based on the assumption of an average Urals price of $50/bbl and envisages a federal budget deficit of $32bn. At $40/bbl, the deficit will rise to $52bn, and at $30/bbl, it will exceed $75bn. While even this level can be covered by existing reserves, the cabinet will seek to generate additional revenue to combat this rising deficit.

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