Economy, Domestic Economy

Economy Less Oil-Reliant

Economy Less Oil-ReliantEconomy Less Oil-Reliant

President Hassan Rouhani said on Wednesday that reliance on oil revenues has considerably reduced in next year's budget.

"The unprecedented oil price fall has made it possible for the government to rid the budget of oil revenue dominance," President Rouhani told a cabinet meeting.

"People can rest assured that the government is able to run the country with the current oil prices," he said. The government has also managed to reduce the budget reliance on oil by generating revenue through non-oil exports, he added.

"The country can take advantage of its geopolitical significance and its numerous capabilities in road, rail and air transit," President Rouhani said, expressing hope that the government's annual revenue from non-oil exports will reach $50 billion by the end of the current year.

Oil prices have plunged more than 40 percent since June to less than $70 a barrel, placing severe strain on Iran's economy, which is already hit by western sanctions imposed over its nuclear energy program.

An OPEC meeting last month failed to reach an agreement on production curbs, mainly because of Saudi Arabia's opposition.

President Rouhani also said that the fall in prices is "politically motivated, at least in part," attributing it to a "conspiracy against the interests of the region, the Muslim people and the Muslim World."

"Iran and the people of the region will not forget such conspiracies, or in other words, treachery against the interests of the Muslim World," he said.

OPEC controls about 40 percent of the world oil market and Saudi Arabia, the largest oil exporter, produces nearly 10 million barrels a day - a third of the OPEC total. Riyadh has thus far refused to follow Iran, Russia, Nigeria and Venezuela in wanting to scale back production to drive prices up.

Some experts argue that the fall in prices has mainly to do with a US oil boom and lower world demand as a result of weakened economies. Saudi Arabia is opposed to cutting production because it fears its market share could erode.