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Oil, Gas Budget Allocations Insufficient: MP

Service : Economy
TEHRAN, Feb 27 (ICANA) – Chairman of the Majlis Energy Commission Hamid Reza Katouzian says the credits allocated to development of oil and gas fields in the 1390 (2011-2012) Budget Bill are insufficient.
Sunday, February 27, 2011 1:20:22 PM
Oil, Gas Budget Allocations Insufficient: MP

Speaking to ICANA, Katouzian added that with the figures forecast for the oil and gas sector in the Budget Bill, the objectives of the 5th Development Plan will not be realized. He said the Energy Commission intends to introduce basic changes to the energy sector of the budget bill. “The oil and gas sector in next year’s budget is very poor and the parliament will have to introduce major changes to the budget bill in order to ensure realization of its goals.” The lawmaker said Iran needed huge investment to increase the level of oil and gas production and even maintain its present production level. However, Katouzian regretted, the government has overlooked this issue in formulating the budget bill. “This has doubled the work of the Energy Commission as we will have to re-formulate the energy section in the budget bill,” the legislator noted. Members of the Economic Commission of the Majlis began discussing the government's new fiscal year's budget proposal on Saturday. The budget bill for the next Iranian calendar year, which begins on March 21, is about 5,390-trillion-rial (USD 539 billion). The total budget figure is divided in two parts. The budget for state-affiliated companies is USD 362 billion and the draft budget is around USD 177 billion. The new budget shows a 45-percent increase compared with the budget of the current Iranian calendar year that was about USD 368 billion. On February 20, the government of President Mahmoud Ahmadinejad submitted the budget bill to Majlis for the upcoming fiscal year. The specialized committees will review lawmaker's suggestions and give a report to Majlis Budget Integration Committee within 10 days. Majlis Budget Integration Committee, which includes two members of the specialized committees, should discuss the budget bill within 15 days and provide its final report for delivering at the open session of Majlis. It takes a few days for lawmakers to discuss the final bill for approving it. The approved budget will be then sent to the country's Guardian Council, whose approval is needed for the bill to become law. One of the reasons behind this year's budget hike is the implementation of the targeted subsidy plan, which was launched in December 2010. The plan aims to gradually remove all subsidies over a five-year period and instead give families cash handouts as compensation. It eliminates subsidies on gasoline, natural gas, electricity and food and is considered to be one of the most important economic undertakings in Iran's modern history. The Fifth Cultural, Social, Economic and Political Development Plan was communicated to the government by Larijani on Thursday (January 20). The Fifth Development Plan was communicated to the parliament after the difference between the Guardian Council and the parliament was resolved in the Experts of Assembly. The Fifth Development Plan (2010–15) sets the guidelines for the socio-economic development of the country over the next five years. The five-year plan is part of "Vision 2025", a plan for long-term sustainable growth. Each year, after approval of the government’s annual budget, the Central Bank of Iran presents a detailed monetary and credit policy guideline to the Money and Credit Council (MCC) for approval. Thereafter, major elements of these policies are incorporated in the five-year economic development plan. The target is self-reliance by 2015 and the implementation of an ambitious economic reform plan, which includes subsidy, banking, taxation, currency, infrastructure, social justice and productivity as its main focus. By removing energy subsidies, Iran intends to make its industries more efficient and competitive with that of the world. Other main objectives of the Fifth Plan are making improvements in public healthcare, and expanding international relations.

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