Russia: Budget on track despite oil crunch

MOSCOW, Nov. 13 (UPI) -- The Russian government has no plans to revise its federal budget for the next three years despite the precipitous decline in world crude prices, officials said.

The government's finance minister told lawmakers that although the apportioned amount of oil and gas revenues has fallen from 50 percent to 30 percent, the three-year federal budget will only require amendments because of inflation, tariffs or market competition variables, the Russian daily Kommersant reported Thursday.

Finance Minister Alexei Kudrin said Wednesday the current price of crude oil, hovering around $55 per barrel in morning trading, was a temporary market reaction. He said oil should level off at around $70 during a 15-year forecast.

The finance minister, who also serves as the Russian deputy prime minister, said the government will utilize a federal reserve fund to make up for any shortfalls in the budget. He predicted the budget will be based on $50 per barrel in 2009, $55 in 2010 and $60 in 2011.

Feeling the crunch from the global economic meltdown, Russian oil firm Rosneft petitioned China for a $13.5 billion line of credit in exchange for oil. Though talks collapsed Wednesday, the move is part of a broader effort to pare losses as several oil majors are looking to restructure their debt with government loans.