April 15, 2016
The government has built the current budget bill assuming an oil price of $40 a barrel this Persian year, exports of 2.25 million barrels a day and a dollar exchange rate averaging 29,970 rials, according to a Majlis deputy.
Deputy Mohammad-Reza-pur Ebrahimi, who is the spokesman for the Majlis Budget Committee, gave the figures in Sunday’s Majlis session.
The price of an OPEC barrel has not topped $40 since last November. For the last six months, it has averaged $32.98. The government usually assumes an oil price lower than the current price, so this year’s assumption is unusually optimistic.
The export assumption of 2.25 million barrels is also optimistic. Before the sanctions crunch, Iran exported an average of 2.5 million barrels a day for two decades, but that dropped to 1.1 million since mid-2012. Most analysts think Iran will require a lot of foreign investment—and a lot of time—to develop new fields before exports get above 2.0 million.
The assumption of a dollar exchange rate of 29,970 rials was not explained. The official exchange rate—used for only such imports as foodstuffs and medicines—is currently 30,278 rials and the Central Bank is progressively pushing that up to get closer to the open market rate of around 35,000 rials. The Central Bank has said it plans to unify the exchange rate “soon,” so the rate for this year is more likely to be close to 35,000 than the 29,970 in the budget.
