Economy, Domestic Economy

NDFI Share From Oil to Remain 20%

NDFI Share From Oil to Remain 20%
NDFI Share From Oil to Remain 20%

Leader of the Islamic Revolution Ayatollah Seyyed Ali Khamenei has asked the parliament to cooperate with the Rouhani administration on National Development Fund of Iran (NDFI)’s portion of oil revenues, Parliament Speaker Ali Larijani said on Monday evening during parliament’s Joint Committee meeting. He added that his suggestion for the parliament members is to agree with NDFI’s 20 percent share of oil revenues for next fiscal year (starting on March 21).

The NDFI was founded on 2011 based on a parliamentary bill. NDFI’s share of oil revenues was set to 20 percent in 2011 and was supposed to increase 3 percent each year. However, both former and current administrations have refused to follow parliament instruction to increase the NDFI’s share. Instead, they have been seeking to add the NDFI’s extra share of oil revenues, which amounts to 12 percent by next year, to their capital budget.

“The Rouhani administration wrote a letter to the Leader explaining the current situation in the oil markets and called for lessening the NDFI’s portion from oil revenues,” Larijani said referring to recent plunges in the prices of oil that has lost half of its value compared to last year.

Larijani also talked about the new structure of the Joint Committee and asked members of the parliament to do their best to meet the legal deadlines for reviewing and passing the next year’s budget bill. He also suggested that as the share of current expenditures in government budget is already high (about 80 percent based on government’s proposed bill) it should not increase by the Joint Committee.

Another development in next year’s budget setting came in Mohammad Bagher Nobakht’s speech, head of management and planning organization. He said on Monday evening that only 75 percent of planned government revenues have been materialized so far this year. Nobakht added this revenue shortage is due to recent reductions in oil prices.

Thus, there would be a 25 percent shortage in current year’s revenues, nonetheless the government has managed to avoid budget deficit this year (ending on March), Nowbakht said. He also said that some of the proposed figures in next year’s budget bill need to be reviewed by the parliament’s Joint Committee due to the recent declines in oil prices.