Russia will cut its spending by 10 percent in 2016, the finance minister said Wednesday, as prices for Moscow's key export commodity slumped to new lows.

"We have agreed that ministries and (government) agencies ... will present their proposals to the finance ministry for optimizing budget expenditure by around 10 percent," Finance Minister Anton Siluanov told an economic conference in Moscow.

"We have to take well thought-out ­measures on how to bring the budget in accordance with the new realities," he said.

"In the current difficult conditions, we must speak of a very thrifty, strict budget policy, in order not to end up with high deficit levels or a high volume of debt," he said.

Russia's 2016 budget is based on an oil price of $50 a barrel and a deficit of 3 ­percent, which President Vladimir Putin has ordered must not be exceeded.

Crude prices on Tuesday dipped below $30 a barrel for the first time in over 12 years. Siluanov said the oil price would have to rise to $82 to fully balance this year's budget.

Siluanov cautioned against expecting a "price rise (for oil) in the immediate future," while economy minister Alexei Ulyukayev predicted that oil prices would remain low for "a very long time."

While last year's budget deficit was only 2.6 percent, this year is expected to be more difficult.

The government has been forced to dip heavily into its reserves and abandon ­support for the ruble, which has slid in value.

The economy has also been pummeled by Western sanctions.

If the government fails to initiate ­austerity measures, "the same thing will happen as in 1998-99, with the public ­paying through inflation for our failures in correlating the budget with the new reality," warned Siluanov, referring to a previous economic crisis which saw Russia default on its debt.