Iran bases budget on oil price of $37.5

The Iranian government has based its budget bill for 2009-10 on an oil price of 37.5 dollars per barrel, the semi-official news agency ILNA reported on Sunday. "In the final version of the budget bill of the next (Iranian) year the oil price was envisaged at 37.5 dollars per barrel," a presidential aide for planning, Mohammad Ghasem Hosseini, was quoted as saying.
The government is due to submit the budget of the next Iranian year that starts on March 21 to parliament for final approval next week. The government is obliged to save extra income beyond the budget base price in the Oil Stabilisation Fund, which is used to support macro energy projects and prop up private sector projects.
President Mahmoud Ahmaginejad's extravagant withdrawals from the fund for construction projects have, however been criticised by economists who are concerned about the falling oil price and predict a budget deficit. Iran, OPEC's second-biggest crude exporter, is highly dependent on oil money, which is its primary source of income.
The managing director of the National Iranian Oil Company, Seifollah Jashnsaz, has put the country's average oil production at 4.05 million bpd, with an average sale of 2.35 million bpd, the ministry's news web site reported. Crude income accounts for 80 percent of foreign earnings, making the government-run economy highly vulnerable to oil price shifts in particular in the face of the drastic crude price fall of 2008.
Oil prices surged to record highs in July of close to 150 dollars a barrel. But the price has since plunged to below 40 dollars. According to the International Monetary Fund report of 2008, Iran would face an "unsustainable current account deficit" in mid-term if the oil price fell below 75 dollars per barrel.