Iranian MP predicts $755M of budget deficit
Tehran, Iran, Nov. 18
By Milad Fashtami - Trend:
A member of the Energy Commission of the Iranian Parliament (Majlis) Seyyed Mehdi Mousavinejad said that 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.
Mousavinejad told Trend Agency on Nov. 18 that the country's budget deficit may amount to 20 trillion rials (some $755 based on the official exchange rate of US dollar).
"The impact of the budget deficit will become obvious in the last months of the current year (to end March 20, 2015)," he said.
"The government should come up with some strategies to manage the budget deficit," the MP added.
Mousavinejad further said that the country should base its next year's budget on $75-80 per barrel of oil.
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. The 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.
Mousavinejad went on to note that unfortunately the OPEC has not held any special meeting to tackle the falling trend of oil prices, adding that the members bore losses due to the organization's inaction.
He further expressed hope that the upcoming OPEC meeting will be fruitful.
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 in Vienna on Nov. 27. OPEC has twelve member-states.
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 the 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 m bpd less that the figure considered in the budget law, which will lead to the budget deficit.