Irani Budget 2009 Based on $37.5 Oil

The Irani news agency ILNA quoted a presidential aide for planning, Mohammad Ghasem Hosseini as saying that in the final version of the budget bill of the next year the oil price was envisaged at $37.5 per barrel.”

The government is due to submit the budget of the next Iranian year that starts on March 21 to parliament for final approval next week.

The government is obliged to save extra income beyond the budget base price in the Oil Stabilization Fund, which is used to support macro energy projects and prop up private sector projects.

President Mahmoud Ahmadinejad's extravagant withdrawals from the fund for construction projects have, however been criticized by economists who are concerned about the falling oil price and predict a budget deficit.

Iran, OPEC's second-biggest crude exporter, is highly dependent on oil money, which is its primary source of income.

The managing director of the National Iranian Oil Company, Seifollah Jashnsaz, has put the country's average oil production at 4.05 million bpd, with an average sale of 2.35 million bpd, the ministry's news Web site reported.

Crude income accounts for 80 percent of foreign earnings, making the government-run economy highly vulnerable to oil price shifts in particular in the face of the drastic crude price fall of 2008.

According to the International Monetary Fund report of 2008, Iran would face an “unsustainable current account deficit” in mid-term if the oil price fell below $75 per barrel.

Author: Ksenia Kochneva