Azerbaijan decides on base oil price in 2018 state budget
Baku, Azerbaijan, Sept. 18
By Azad Hasanli – Trend:
Azerbaijan’s government has based its projections for 2018 state budget on an oil price of $45 per barrel, a source in the government told Trend.
Today, Azerbaijan’s Ministry of Finance submitted a draft state budget and a draft consolidated budget for 2018, as well as consolidated budget indicators for the next three years to the Cabinet of Ministers.
Previously, Azerbaijani government used to prepare several different scenarios with different oil prices. For example, the average annual oil price was projected at $35, $40 and $45 per barrel for the 2017 state budget.
The source did not specify why one option was used when preparing the state budget for 2018. Other parameters of the state budget are yet unknown.
The budgeted oil price set by the Azerbaijani government roughly equals forecasts of its neighbors. Russian media outlets earlier reported that the country's budget for 2017-2019 will be pegged on an oil price of $40 per barrel. In Kazakhstan, the budgeted oil price was $45 per barrel.
During the year, the price of Brent crude increased by 20.17 percent to stand at $55.25 per barrel on Sept. 18.
The price of Azerbaijan’s Light oil increased by 22 percent during the year and amounted to $58.3 per barrel on Sept. 15.
Experts and international financial institutions cannot reach an agreement on future oil prices. Some of them, for example, the International Monetary Fund (IMF) downgraded its forecasts. In July, the IMF lowered forecasts for 2017 and 2018 by about $3, down to $51.9 and $52 per barrel, respectively.
Other financial institutions, such as the World Bank and the international ratings agency Moody's have rather positive forecasts.
According to the World Bank, the oil price will be $55 per barrel in 2017 and $60 per barrel in 2018. Moody’s expects the oil price to vary between $40 and $60 per barrel in the near future.