Parliament Research Center Doubts Realization of Oil Revenues in the 98 Budget Bill

The Parliament Research Center has expressed serious doubts regarding the realization of projected oil revenues in the next solar year's budget. This report, published on the official website of the Parliament Research Center, states that the dependency of the next year's budget bill on oil is about 35%, compared to 33.3% this year. The budget bill for the next solar year considers oil revenues at 142 trillion tomans, which is 32% more than this year in terms of rials. Meanwhile, due to U.S. sanctions, Iran's oil exports have decreased by more than half. The budget bill does not specify the exact amount of oil exports, exchange rates, and oil prices, leaving the door open to compensate for the budget deficit caused by falling oil exports by increasing the exchange rate. The Parliament Research Center states that the figures related to calculating the oil share in the budget are not mentioned and must be estimated: 'According to our calculations, in the 98 budget bill, the price of each barrel of oil and gas condensate is $54, and the average exchange rate of the dollar is about 6000 tomans (about 4200 tomans for essential goods and 8000 tomans for other goods).' The exchange rate of the dollar against the rial shows a 43% increase compared to this year. The report adds that the amount of oil exports is assumed to be about 1 million and 635 thousand barrels, of which 1.5 million barrels relate to oil and gas condensate exports, and 135 thousand barrels relate to the delivery of gas condensate to petrochemicals. Gas condensate is a type of ultra-light and expensive crude oil produced from gas fields. According to estimates from the World Bank and the International Energy Agency, it is not expected that Iran's oil and gas condensate exports will exceed one million barrels next year, down from 2.5 million barrels last year. The Parliament Research Center states that gas export revenues are also considered at $3.4 billion. Based on the Parliament's calculations, the total revenues from oil, gas, and gas condensates next year, according to the government's forecast, will be about $35.5 billion. About 65.5% of this amount will be government budget revenues. In other words, the government expects budget revenues from oil, gas, and gas condensate exports next year to be $23 billion and 750 million (142 trillion tomans). The share of the National Development Fund (20%) is about $6 billion and 590 million, while the share of national oil and gas companies (14.5%) is about $5 billion and 160 million. Regarding the 35% dependency of the budget on oil and gas export revenues, the Parliament Research Center states that this ratio is less than the actual amount, as non-oil budget resources (including taxes, etc.) are practically estimated optimistically, and full realization of them is unlikely. Details from the Central Bank of Iran regarding the realization of revenues for the first seven months of the current budget year show that the government had only 60 trillion tomans in revenues instead of the 84 trillion tomans of approved tax revenues. Other operational revenues of the government amounted to only 15 trillion tomans, while it was supposed to be close to 44 trillion tomans. Overall, the budget for the first seven months of the current year faced a resource deficit of 39 trillion tomans, an unprecedented figure. The Research Center also states that 'if we assume that Iran's oil exports are likely to be 1 to 1.2 million barrels (two-thirds of the budget forecast) and that all of this figure is realized or adequately offset without any discounts, all budget calculations must be disregarded, and other calculations must be made, assuming that the price of oil remains around $54.' This report states that every dollar decrease in the price of oil next year will lead to a budget resource reduction of more than 2.4 trillion tomans. The current price of Brent crude oil, which is usually $2 to $3 higher than the average price of various types of Iranian oil, is about $53.21.