“Oil prices have been rising and we predict that they will stay at the $100 we asked permission from the government to have an oil price level ceiling in the budget which is $95,” Shamseddin Hosseini said.
Even with a possible tumble in the price, Iran will be able to meet all its development needs at $81.5 per barrel, the figure used in current budget calculations, said Hosseini,
“Around 20 percent of the $81.5 will go into the country’s development fund,” he said, speaking on the sidelines of an industry event in Jeddah.
Asked about how sanctions imposed by the West had affected Iran’s economic growth, Hosseini said that policies such as trimming subsidizes on flour and gasoline had helped the country overcome challenges.
“The economic sanctions from the West do cause Iran some disturbances, but this will not affect the country’s advance,” he said.
By cutting back on subsidies for staples, Iran had reduced domestic demand and conjured up surpluses which could be exported.
Adjusting flour subsidizes had cut consumption by 30 percent, allowing wheat exports, and a similar move on motor fuel and swung Iran from being a net importer of gasoline to an exporter.
“We currently have 2 million tons of wheat that we plan to export over the spot market and we have one billion liters of gasoline (around 700,000 tons) that can also be exported,” he said.
Earlier this month, the International Monetary Fund said in a statement that strong growth in non-oil sectors and good performance in agriculture helped Iran recover to 3.5 percent growth in 2009-10 despite a fall in oil prices.
The Islamic Republic also managed to cut its inflation level to 12.4 percent for 2010-11 from 25.4 percent two years earlier, the IMF report added.
“For this year we will continue to see growth in the non-oil sectors and exports which will help the economy this year,” said Hosseini.
