Leaps in oil prices on world markets not to have major impact on state budget of Azerbaijan in 2012

Business Materials 6 June 2012 18:12 (UTC +04:00)

Azerbaijan, Baku, June 6 /Trend A.Akhundov/

Azerbaijani MPs believes leaps in oil prices on world markets and they reduce below the level of $100 will not have a major impact on the state budget of Azerbaijan in 2012.

Forecasted oil price has increased from $80 to $100 per barrel in the result of adjusting the parameters of the projected state and consolidated budgets of Azerbaijan in 2012.

Member of the parliamentary committee on economic policy, MP Ali Masimli said oil price increase by $1 brings additional 25 million manat to the state budget, and vice versa.

"With this regard leaps in oil prices on world markets can have some impact on the budget; however, we don't expect any major influences for the end of the year. Despite temporary fluctuations, influential expert groups believe that the export price of Azerbaijani oil on world markets in 2012 will not fall below $100, as well as in 2011, when the average price was higher than $114," Masimli told Trend on Wednesday.

In addition, he said, the structure of the state budget is designed in such way that even if any unforeseen accidents, natural disasters happens we will be able to get out of the situation with minimal losses.

"It should also be noted that the reserve funds available in the state budget is sufficient and allows to maneuver and carry out budgetary obligations in due measure," Masimli said.
Masimli added that the issues related to oil, are not only economic, but also largely political.
"The negative processes in the global economy, including the European Union, as well as slowing economic growth in China, are very important in terms of impact on oil production and its price in the world. In addition, OPEC also began to maneuver in the oil production. Exchange rates of leading currencies and oil prices began to fluctuate. Issues related to oil, are not only economic, but also largely political. Political cataclysms in the world have an impact on production and the price of oil," Masimli said.

MP Vahid Ahmedov, who is also a member of the committee on economic policy, said reduction in oil prices on world markets is due to political issues, and perhaps this will continue for some time.

"It is possible that the decline in prices will be even more dramatic. However, these processes should not create serious problems for the state budget," Ahmedov told Trend on Wednesday.

The government is also of the opinion that swings in oil prices on world markets are not harmful to the state budget of Azerbaijan.

"We see no special risks to the budget of the country. Prices still fluctuate. Throughout the year, the average oil price was above $110, so there may be some fluctuations, but it is not a matter of principle," Minister of Finance Samir Sharifov told Trend earlier. "We believe that there would be no serious disruption."

Official exchange rate on June 6 is 0.7858 AZN/USD