Moscow relies on income from oil and gas

 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 FX reserves to cover a deficit stretched by the cost of the Ukraine conflict.

SANCTIONS

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.

As a consequence of sanctions, Moscow has been forced to sell energy at a large discount and, although the 2023 budget is based on a Urals price of $70.10 per barrel, the average price for Russia's main blend in January was $49.48 a barrel, down 42% on January 2022.

The ministry said on Monday it was studying ways to switch to an alternative price indicator for tax purposes, as the Urals oil price was becoming less representative of export prices for Russian oil.

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