Iranian MPs suggest oil sell cut
Baku, Azerbaijan, Jan. 7
By Umid Niayesh - Trend:
At least 124 Iranian MPs have signed a scroll that suggests suspending crude oil export while its price continues to fall in global markets, Mohammad Esmailnia, a member of the Parliament's Agriculture Commission said.
"While our enemies' conspiracy is aimed to put the oil price below $50 barrel, oil selling is a disgrace to us and we have to stop oil exports," Esmailnia said, the Islamic Republic's ISCA news agency reported Jan. 7.
Iran should change the oil price fall from a threat to an opportunity by cutting its dependence on oil revenues, the Iranian MP said.
He also said the country's oil revenues should completely go to the National Development Fund (NDF). The NDF is Iran's sovereign wealth fund and was established to transform oil and gas revenues to productive investment for future generation.
The Islamic Republic officials, including president Hassan Rouhani, have on numerous occasions argued that the oil price fall is a political issue rather than an economic one.
The fall in the global crude oil price from almost $110/barrel to below $50/barrel in recent months has imposed pressure on the Iranian economy, which was already suffering from international sanctions.
There is uncertainty over how the government will fund its proposed budget for next fiscal year (to start on March 2015), even though it has already dropped the assumed oil price from $100/barrel to $72/barrel.
The OPEC oil basket price was $107.89 in mid-June, but has been in dramatic decline, especially after October. The price stood at $46.69 a barrel on Jan. 6.
Reports suggest that if the current tendency continues, the total budget deficit for Iran's current year may soar above $2.5 billion.
Experts also believe that due to the continuing fall of oil prices in global markets, a budget deficit in the next calendar year is also inevitable. President Rouhani already confirmed that the Islamic Republic's oil revenues have decreased by 30 percent as a result of the price fall.
Edited by CN
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