Iran refutes reports on new budget on $40 oil a barrel

/By AzerNews/

By Sara Rajabova

Iran’s Oil Minister has refused reports that the country’s government has counted on $35 to $40 per barrel for oil in drafting the country’s next-year national budget.

Bijan Zangeneh said no specific base price for oil has been agreed on in the government.

Mansour Moazzami, a top advisor to Zangeneh, has recently said the base price in the next year’s budget has been set at $35-$40 and the government will present the budget to the parliament before next Thursday.

Zangeneh, however, noted that the price that will be decided on will be the closest to the market trend.

Currently, price of the Brent crude oil stands at $37.

Oil revenues make up the lifeline of the Iranian economy. The budget for the current year (ending 21 March 2016) is based on speculations that the country would sell oil at $70 per barrel. However, the plunging prices of oil are expected to prevent a certain share of the revenues from being materialized.

The Iranian government devises new strategies with a view to decrease dependence on oil incomes. Government officials say they have cut the country’s dependence on oil to a third of what it used to be to around 31.5%.

President Hassan Rouhani earlier announced that the government has decreased the reliance on oil to 25 percent in the budget bill for March 2016-2017.

Iran’s media reported last week that the price of the country’s heavy crude oil had plunged below $30 per barrel for the first time in almost 20 years in mid-December trade.

Shana news agency – affiliated to Iran’s Oil Ministry – said in a report that the country had sold heavy crude at $29.4 per barrel in the week ending on December18.

The report added that Iran had also sold its light crude at $35.1 per barrel over the same period. Both figures show major drops from standard levels of the previous months. The average price of Iran’s heavy oil stood at $48.6 since March, Shana reported. The average price of the light oil stood at $50.6.