Iran plans to tighten spending and raise taxes to help offset the negative impact of sharply lower oil prices and international sanctions on the state budget, its oil minister said.
OPEC member Iran, with the world's fourth-largest oil reserves, is heavily reliant on petroleum exports and adopted a budget for the current fiscal year based on a projected price of $100 per barrel.
But hit by weak demand and increased shale production, global oil prices are now well below $80 a barrel, having collapsed by some 30 percent since June, and they are expected to keep sliding well into 2015, the International Energy Agency said Friday.
“Iran intends to adopt a contractionary monetary policy for next year and raise tax revenues to compensate for the affects of the oil price slide,” Oil Minister Bijan Namdar Zanganeh said, quoted in Saturday's press.
Zanganeh did not provide details on plans for the next fiscal year, which will run from March 21, 2015 through March 20, 2016.
Also, he did not provide any up-to-date information on the state of the budget.
However, a number of MPs have urged the government to set a benchmark price of $80 a barrel.
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At the same time, the government plans to draw on Iran's sovereign development fund to help keep oil development projects on line.
“By drawing upon its National Development Fund to reimburse contractors active in upstream projects, Iran will make up for the impact of oil revenue decline on these projects,” Zanganeh was quoted by the ministry's Shana news agency as saying.
Tehran is also studying measures to help stabilise oil prices, to be discussed at the next meeting of the Organisation of Petroleum Exporting Countries on November 27, Zanganeh said.
The minister travelled to fellow OPEC member Kuwait on Tuesday to discuss the sagging market with the country's emir, Sheikh Sabal al-Ahmed al-Sabah, Shana said.
And Rafael Ramirez, oil minister of Venezuela, is to visit Tehran to discuss a proposed call from Caracas and Ecuador for OPEC to cut production.
Iran's finances are being hit not only by the weaker crude market, but also by international sanctions on finance and oil exports imposed over its controversial nuclear energy programme.
Exports have plunged from more than 2.2 million barrels a day in 2011 to a current level of around 1.3 million bpd.