Iranian parliament suggests $80 oil for next year’s budget
Tehran, Iran, Nov. 24
By Milad Fashtami - Trend:
The head of the Planning and Budget Commission of Iranian Parliament (Majlis) said that the assembly's proposal for oil price in the next year's budget plan is around $80.
Gholamreza Tajgardoon said that the parliament has announced its suggestion to the government, Iran's IRNA News Agency reported on Nov. 24.
"The falling trend of oil prices seems to be continuing, so we don't expect prices to bounce back in the near future," he said.
He mentioned to Iran's current year budget deficit, saying "the government can pass this hurdle with prioritizing economic and industrial plans."
Head of Tehran Chamber of Commerce Yahya Al-e Es'haq previously said that government plans to base next year's budget plan on $70-80 per barrel of oil.
"If the government reduces its budget dependence on oil revenues, then the risk of any fluctuations in global prices would be minimal for Iran," he said, Iran's Mehr News Agency reported on Nov. 18.
"The next year's budget plan would most probably envisage the exchange rate of US dollar at below 30,000 rials," the official added.
Iran is expected to face a budget deficit in the current Iranian calendar year (to end March 20, 2015), due to the sharp fall in oil prices.
Iran's current year budget envisages the price of $100 per barrel of oil. This is while each Iranian oil barrel is currently sold at around $80.
Based on Iran's budget law, the country is supposed to export 1.4 million barrels of oil (including gas condensate) per day.
Reports suggest that the country is daily earning $18-20 million less than the projected figure, so if the current trend continues the total budget deficit may soar above $2.5 billion.
Iranian President Hassan Rouhani has also predicted that Iran's total oil revenues will be 30 percent less than expected.
Iran has reportedly negotiated with at least five members of the Organization of the Petroleum Exporting Countries (OPEC) to reach an agreement over the global management of oil prices, ahead of the organization's upcoming meeting.
Qatar, Kuwait, Venezuela, Iraq, and Ecuador are the mentioned five countries.
The 166th (ordinary) OPEC meeting is scheduled to be held on Nov.27 in Vienna. OPEC has twelve member countries.
Iranian Oil Minister Bijan Namdar Zangeneh said on Nov. 16 that the oil producing countries need to increase the prices as much as the market allows.
Iran decided to sell its crude oil to Asia in November at the biggest discount in almost six years.
The decision was made after Saudi Arabia cut prices for all grades and to all regions for November. Qatar and Iraq decreased their prices.
Masoud Mir Kazemi, the head of energy commission in Iran's parliament and former oil minister told Mehr on Oct.17 that according to the Oil Ministry's figures, Iran exported 0.1 mbpd less that the figure considered in the budget law, which will lead to budget deficit.