Majlis Plans to Cut Oil Dependence

Majlis Plans to Cut Oil Dependence  Majlis Plans to Cut Oil Dependence

A parliamentary committee has put forth a proposal aiming to gradually cut budget dependence on oil revenues during the next five years, Eghtesad News quoted a lawmaker as saying on Friday.  

"According to the motion, the contribution of oil revenues to the annual budget will be reduced by 20 percent each year, so that the oil dependence is totally cut after five years," spokesman of the parliament's economic committee, Mohammad Alipour stated.

He added that the reported oil price of $40 per barrel for the budget bill for the next Iranian year (begins March 21) is a suggestion by the economy minister, which has not been "formally" submitted to the parliament yet.

The parliamentary committee on planning, budget, and auditing together with the economic committee have discussed the issue of cutting dependence on oil prices, he said, before a special committee was formed in the parliament to examine the government's budget bill for next year. The two committees both pursued the same objective, said the MP.  

However, members of the economic committee were split on whether to vote for a gradual or an instant cut in oil dependence, with the majority insisting on the former.

The committee has submitted its suggestion to the special committee which is responsible for examining the budget, said Alipour, adding it is yet to be seen what the final decision of the committee would be.

The MP also complained about the suggested basing of next year's budget on $40 oil price, describing it as "irrational". Instead, he proposed that budget should be based on an oil price somewhere between $50-72.

  Crude oil prices have fallen by around 60 percent since June, triggered by oversupply. Analysts expect prices to remain under pressure, prompting cuts to price forecasts in 2015 and 2016.