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Azerbaijani government expects 5bln manat extra oil revenues

Business Materials 23 May 2011 20:45 (UTC +04:00)
Azerbaijan is expected to receive additional 5 billion manat due to the increase in the oil price from $60 stipulated in the state budget to $80 per barrel.
Azerbaijani government expects 5bln manat extra oil revenues

Azerbaijan, Baku, May 23 / Trend A.Akhundov /

Azerbaijan is expected to receive additional 5 billion manat due to the increase in the oil price from $60 stipulated in the state budget to $80 per barrel.

Based on the Accounting Chamber's conclusion on the bill "On amendments to the Law on the 2011-state budget of Azerbaijan", the country's state budget is expected to receive additional funds in amount of 770 million manat and the State Oil Fund - 3,500-4,000 million manat.

"Prices recorded on the world oil market in January-April 2011 at above $100 per barrel suggests an even greater increase in the level of key macroeconomic indicators of the country's economy in late 2011, and provision of the revenue part of the budget at the expense of the necessary funds," the conclusion reads.

Based on the document, the State Oil Fund's (SOFAZ) main goal stipulating maintaining the level of foreign exchange reserves in late 2011 at $ 30 billion after the implementation of all fund transfers will be achieved. SOFAZ is expected to transfer 9.18 billion manat to the state budget in 2011, which is up by 41.7 percent (2.7 billion manat) compared to the forecast approved for 2011, and amount to 59 percent of the proposed state budget revenues.

The Azerbaijani parliamentary committees on economic and social policies recommended on Monday the bill "On amendments to the Law on the 2011-state budget of Azerbaijan" to the parliament for discussion.

Presenting the bill, Finance Minister Samir Sharifov said the favorable situation in the world oil market enabled to keep the cost of the Azerbaijani oil by more than 80 percent above the price set in the 2011-state budget ($60) for a long time.

"Thus, additional revenues of the State Oil Fund of the Azerbaijan Republic totaled 976.4 million manat in the first quarter of 2011 compared to the earlier projected 193.5 million manat. Accordingly, the additional revenue hit $ 1.1 billion manat. Given the positive situation on the world oil markets due to price differences approved in 2011 in the state budget, the State Oil Fund expected additional revenue," Sharifov said.

Based on the Finance Ministry's estimates, an increase in the base oil prices set in the 2011-state budget of Azerbaijan from $60 to $80 dollars would provide additional revenues to the State Oil Fund at the level of 3,684 billion manat.

The official exchange rate is 0.79 manat to $1 on May 23.

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