Next year's budget has been formulated irrespective of possible fluctuations in foreign exchange rates and oil prices, stipulating 537 trillion rials ($20.1 billion) in revenues from exports of crude oil, gas, and gas condensates, Mohammad Mehdi Mofatteh, spokesman of the Parliament's Integration Committee, said Tuesday.
The budget also stipulated that 20 percent of net value of natural gas exports should be deposited with the National Development Fund of Iran (NDFI), after gas imports are deducted.
A total of 14.5 percent of oil revenues will be held by the National Iranian Oil Company (NIOC) for capital and current expenditures, which also includes payments for buyback contracts, as well as tanker and insurance costs. A further 20 percent will also be held by the NDFI, according to the new budget.
The NIOC is obliged to deposit 85.5 percent of oil revenues (including money earned from gas condensate export) into the Treasury’s account via the Central Bank of Iran (CBI), which will deposit the amount into certified domestic and overseas accounts.
Global oil prices have tumbled almost 60 percent since June, forcing governments to reduce subsidies on diesel, natural gas and utilities and companies to cut billions from capital budgets.
President Hassan Rouhani said Dec. 7 that he expected oil prices at near six-year lows to place “short-term pressure” on state revenue.
The Iranian calendar year begins March 21.
>>>NDFI Share Determined
The parliament has approved the amount the National Development Fund of Iran will receive from the export of crude oil and gas condensates, ISNA reported Tuesday.
During Tuesday's session, members of the parliament discussed a bill on removing the obstacles to competitiveness and improving the country's financial system. The lawmakers decided that all refineries can export surplus oil products after transferring the sum earned from regular export rate – 95 percent of the Persian Gulf FOB price – in cash or as one-month credit to each of the oil ministry subsidiaries.
The new approval urges the oil ministry to provide the NDFI with its share of the oil and gas condensate exports based on the delivery price set by the refineries. Also, the oil bourse has been given priority in trading of crude oil, gas condensate and electricity.
Oil ministry's affiliated companies, based on the new parliamentary approval, have been allowed to set the base prices for crude oil and gas condensate up to 2 percent lower than the Persian Gulf FOB price and 3 percent lower for development of the existing refineries and also for construction of new refineries.
The oil ministry and other relevant organizations are allowed to offer competitive refueling and servicing prices at the country's ports in a bid to attract foreign shipping lines to increase maritime trade with Iran.
The new approval was ratified as 161 lawmakers voted for, 9 against and three abstained.
>>>Unreasonable Provision
The new approval will have a positive impact on the refineries' output, said the managing director of Bandar Abbas Oil Refinery, suggesting that it's not reasonable for the refineries to pay the NDFI 29 percent share from the sales of crude oil and gas condensate, "so that provision should be omitted from the approval."
"This is expected to bring about trading advantage for Bandar Abbas, Lavan and Abadan refineries, which export heavy fuel oil," Hashem Namvar stated. Export of surplus gasoline, gasoil and other oil products would also be facilitated once the Persian Gulf Star refinery becomes operational (it is scheduled to start operation next year).
Namvar emphasized that refineries should not pay any share of their revenues to the NDFI "simply because they are buying crude oil at international rates."
