Russia 's finance ministry has proposed using extra income from higher-than-expected oil prices to beef up the country's reserve fund and lower domestic borrowing, rather than increase spending, acting finance minister Anton Siluanov said Wednesday.

Siluanov, who is widely expected to remain head of the ministry under the new government, said a higher-than-expected average oil price has led to extra income of around 808 billion rubles ($26.5 billion).

Presenting revisions to the 2012 budget, he said the government has proposed cutting domestic borrowing by RUB500 billion and to save the rest of the extra oil revenue in the country's reserve fund.

Siluanov said he expects the government to shortly prepare a so-called budget rule, requiring a share of oil income to be put aside.

Russia 's budget relies on oil income and this dependence has increased since the beginning of 2012.

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