Iran's 978 Trillion Toman Budget for 2016 Approved by Parliament

The Iranian parliament concluded its review of the 2016 budget in a public session on Tuesday, April 20, after 11 sessions, approving a budget ceiling of 978 trillion tomans. According to the Islamic Republic News Agency, the approved budget allocates 335 trillion tomans for the government's general resources and 662 trillion tomans for state-owned companies. The government of Hassan Rouhani had proposed a budget of 952 trillion tomans for the current year, which was increased by 26 trillion tomans by the parliament. Based on this budget, the price of each barrel of oil is set at $40, with Iran's daily exports estimated at 2.25 million barrels. The general budget bill for 2016 was supposed to be approved before the start of the new year, but its approval was delayed due to the government's late submission of the budget bill and the parliamentary elections. The Islamic Consultative Assembly had previously approved a two-twelfths budget for the first two months of this year. Multi-twelfths budgets are typically approved in emergencies, such as when governments are uncertain about expected revenues being realized on time. Mohammad Baqer Nobakht, head of the Management and Planning Organization, stated during the budget bill presentation that the delay in presenting this bill was due to the uncertainty surrounding the implementation of the nuclear agreement and budget resources, including oil revenues that were under sanctions. The parliament's Research Center had previously announced that three-quarters of this year's budget repeats last year's bill but has fewer issues than before. According to the 2016 budget, the government is required to eliminate subsidies for the 'three wealthiest deciles of society,' meaning 24 million people. On Tuesday, parliament representatives also approved that fuel distribution in 2016 would continue to be conducted with fuel cards, and gasoline would be offered at two different prices. In this resolution, the price of gasoline was not determined and it was stated that 'the prices of various fuels will be equal to their prices at the end of 2015, in accordance with' the parliament's resolution on Tuesday. According to the parliament's resolution, gasoline exceeding the quota set by the government will be offered based on 'the cost price,' which includes the price of imported gasoline at the port plus 'ancillary costs.' This year's budget must be approved by the Guardian Council to become executable. In this context, Iran's defense budget was also increased by another 3.5 trillion tomans. The government announced that more than seven million people will no longer receive cash subsidies. The International Monetary Fund predicts Iran's economic growth will be four percent in 2016. Jahangiri stated that no institution has returned even a dollar of oil sales revenue to the government.