Shabtabnews In this dark night, I have lost my way – Arise from a corner, oh you the star of guidance.
Radiofarda – Iran’s Economic Coordination Council has forecast a more than 50 percent decline in the country’s oil sales in the next Iranian fiscal year which starts in March 2019.
The forecast puts Iran’s oil exports next year at one million barrel per day which is less than half of the figure forecast for the current year, Iranian official news agency IRNA reported December 1.
Meanwhile, hardline IRGC-linked Fars news agency in a report on Saturday said the government’s forecast for oil price is $60 per barrel in next year’s budget, while critics say the Rouhani administration has based its revenues on $75 oil, which might be too high.
In short, while the estimated quantity of oil has been announced, the estimated price might not be precisely known until the budget is officially presented to parliament.
Critics as well as the Iranian Parliament’s research center say the real oil sale figure next year would be as low as 500 thousand barrels per day, and the price could be much lower than expected, adding this is going to put the Iranian government face to face with a bigger budget deficit.
Prominent Iranian journalist Amir Taheri tweeted on Saturday that “President Rouhani’s new budget is based on assumption that oil would sell at $75 a barrel between 21 March 2019 & 20 March 2020. His budget would have 13 per cent deficit. But what if oil price slides as it is doing now? This budget of fantasy to be presented to Majlis Thursday.”
Political activists also lashed out at the government for its unrealistic estimates of oil sales and price and the rate of exchange.
An activist writing under the alias Mickle Scofield tweeted, “In the budget for the next year, the estimate for oil sale is one million barrel per day while it is unlikely that Tehran could sell more than 500 thousand barrels. The estimate is based on the rate of exchange of eight thousand tumans per US dollar while minimum rate of exchange for dollar could go as high as 16000 tumans.” He noted that whatever Iran earns from oil exports can be spent only on food and medicine imports.
Iranian activists, particularly those inside Iran, fearing retaliation and persecution use false names and VPNs to evade tracking and identification by security forces.
The Economic Coordination Council reviewed next year’s budget during its meeting on Saturday and called for reducing the share of oil revenues in the budget as well as advising the government to import essential commodities with subsidized dollars, IRNA reported. This means the government would offer cheap dollars to importers, which is the case now, but what actually happens is that at the retail level merchants set prices based on higher, free market dollar rates. This is creating very high prices for essential needs of ordinary people.
Clergy Secures Millions Of Dollars In Iran’s Budget Bill
According to IRNA, the coordination council, which has been established following the U.S. withdrawal from the nuclear deal with Iran and the ensuing economic difficulties, is attended by the heads of legislative, executive and judiciary branches of the government as well as several other state officials.
The report says that the council emphasized “attention to the needs of low-income strata of the society,” and called on the government “to provide essential commodities for the people at a subsidized rate, support production, boost employment, extend financial support to workers and pensioners, and complete abandoned development projects with the participation of the people and private sector.”
These are in fact part of the government’s responsibilities it has failed to fulfill, even when the country was not facing a serious economic crisis, because of inefficiency, mismanagement and widespread corruption.
Meanwhile, the council has barred the government from saving 10 percent of the oil revenue in the country’s National Development Fund, which is another name for the foreign currency reserve, Fars news agency reported.
The Iranian government had declared earlier that its revenues will face a decline next year due to U.S. sanctions.
The current price of oil is $60 per barrel for Brent oil and around $51 for West Texas Intermediate. The price of Iranian oil is usually two to three dollars less than the North Sea Brent price per barrel.
In the current year’s budget, the estimated price of oil and natural gas products was $55 per barrel. The average oil and gas products sale in the current year was 2.5 million bpd.
Following the reimposition of US sanctions, Iran’s oil exports have dropped. According to Reuters, Iran’s entire oil export to Asia during November has been 762 thousand barrels, which is its lowest in five years.
In another development, the Economic Coordination Council has called for withdrawing money from the National Development Fund in order to make up for the budget deficit.
The council’s ratification and advice needs to be endorsed by Iran’s Supreme Leader Ayatollah Ali Khamenei.
The government is to submit the budget bill to parliament by Thursday December 6.
Vice-President Mohammad Baqer Nobakht has told the press that the legislature will ratify the budget bill by Sunday December 9. This is unusual, as in previous years parliament debated the budget bill for several weeks before passing it.
Last year’s budget bill, which cut expenditures in some areas, handsomely rewarded religious institutions and the armed forces, as well as the police. That was a factor in igniting mass protests on December 28, which shook the country for more than a week.
