Dependence of Azerbaijan’s State Budget on Oil Sector Weakens: Commission Head
Azerbaijan, Baku / corr. Trend I.Khalilova / The Head of Azerbaijan Parliament's Permanent Commission on Economic Policy, Ziyad Samadzade, said on 25 May at the Parliament that the dependence of the State budget of Azerbaijan on oil sector is gradually weakening. He considers it as notable that the specific gravity of the State Oil Fund of Azerbaijan (SOFAZ) in forming the State budget revenues decreased from 11 to 10.4%.
"According to our assessments, the oil sector still remains in the lead due to the obvious reasons. All over the world, nearly five to six years are required to establish non-oil sectors and receive additional revenues," he said.
Yet 425 of the State budget revenues are formed at the expense of the oil sector. According to the Finance Minister of Azerbaijan, Samir Sharifov, in 2008-2009 the dependence of the State budget on oil revenues will increase. Depending on the world oil prices, in 2009 the oil income to SOFAZ may increase up to $4bln. As a result of the amendments to the State budget, the transfers from SOFAZ are not intended to be increased, but additional expenditures will amount to AZN 138.5mln. Of these, 50mln will be directed towards the Baku-Tbilisi-Kars railway project and AZN 88.5mln towards the State Oil Company of Azerbaijan.
The Minister highlighted the readiness of the Government to decrease the dependence of the State budget on the oil sector. Therefore, it plans to develop the non-oil sector and improve infrastructure.
According to Sharifov, in the near future, the oil factor will be dominant in the GDP and aggregate budget of Azerbaijan. Presently the SOCAR stably produces 200,000 barrels of oil per day and the volume of the oil production by Azerbaijan International Operating Company equals 600,000 barrels per day. It is intended that the daily production volume from Azeri-Chirag-Guneshly field will equal 1.2mln barrels.
"Therefore, I consider that in the short-term outlook, the dependence of the State budget on oil revenues will continue to be significant," the Minister said.