Russia’s Stabilization Fund, set up to accrue windfall oil revenues, rose 4% in May, reaching 3.026 trillion rubles ($117 billion) June 1, the Finance Ministry said Thursday. From the beginning of the year, the fund has therefore increased 29%, the ministry’s press service said.

According to the Finance Ministry’s investment formula, U.S. dollars account for 45% of the fund’s foreign currency, euros make up 45%, and British pounds 10%.

The Fitch Ratings agency has said the fund’s assets could increase 50% through 2007 to reach $135 billion.

The 2007 budget has projected that the fund will gain 1.691 trillion rubles ($65 billion) by the end of the year, given an average oil price of $61 per barrel.

But the Finance Ministry, and the Ministry of Economic Development and Trade adjusted the oil price forecasts downward to $55 per barrel, which recalibrates fund growth expectations to 1.290 trillion rubles ($50 billion).

The fund will thereby total 3.691 trillion rubles ($142 billion), instead of more than 4 trillion rubles ($154 billion) by the end of the year.

From 2008, the Stabilization Fund will be divided into the Reserve Fund and the National Prosperity Fund. The Reserve Fund, expected to total 10% of Russia’s GDP, will cushion the federal budget in the event of an oil price plunge. Oil and gas revenues above this limit will supplement current budget spending and will go to the National Prosperity Fund.

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