Iran parliamentary committee cuts National Development Fund’s share of oil

An Iranian parliamentary ad hoc committee reviewing the country’s national budget bill has cut the share of state-run rainy day kitty from oil revenues to 20 percent from 26 percent as oil prices keep falling.

“The share of National Development Fund of Iran (NDFI) from oil [revenues] has been reduced to 20 percent,” Mohammad Mehdi Mofateh, spokesman for the parliament (Majlis) Ad Hoc Budget Review Committee, said on Tuesday.

He said that a 20 percent share from Iran’s natural gas exports will also be funneled into the fund as of February.

The Iranian parliament is currently reviewing a budget bill President Hassan Rouhani has submitted for Iran’s next fiscal year which starts on March 21.

Rouhani has sought to reduce the share of petrodollars in Iran’s budget by a third as the country has seen its oil revenues fall by 30 percent in recent months. Iran’s national budget has traditionally been drawn up based on revenues from oil which Iran holds in large quantity.

Mofateh said the budget for next fiscal year is based on $72 oil and that the lawmakers would not modify the figure.

Oil prices have plunged nearly 60 percent since June last year over increased supplies by certain countries such as Saudi Arabia and lackluster global economic growth.

OPEC, which pumps out about 40 percent of the world’s oil, has so far refrained from cutting its production to balance the market mainly due to opposition from Saudi Arabia. Iran is a leading producer of the 12-member Organization of the Petroleum Exporting Countries.

The parliament has already allowed the government to increase its revenues from income tax in the next Iranian calendar year by 22 percent and up its earnings from miscellaneous income tax by almost 40 percent.