Iran fears big budget deficit despite oil takings

Iranian officials say they fear a deep budget deficit despite record oil prices because targeted revenue from privatisation and car imports has not been realised, media reported on Sunday.
Opec's second-largest producer had budgeted for an oil price of $19 per barrel, but the country is currently selling oil at $40 per barrel as conflict in Iraq and voracious Chinese demand spur global crude prices.
Surplus revenue goes into a rainy-day kitty called the Oil Stabilisation Fund. The government is supposed to tap it only for major investments or if oil revenue falls below target.
But high oil prices are a double-edged sword for gas-guzzling Iran, which has to import 43 percent of its gasoline owing to a lack of refining capacity.
"The deficit in the year to March 2005 could mount to $5.7 billion," MP Rasul Sadighi was quoted as saying by Hambastegi daily.
Iran's Oil Ministry has already applied to withdraw $1.3 billion from the oil fund to pay for subsidies and keep gasoline prices at 10 cents a litre.
The country's parliament is due to discuss the withdrawal soon, following an initial approval by its energy commission for tapping the fund.
A $20-billion surplus is expected to accumulate in the oil fund by March 2005, but lawmakers have made no calls to syphon the buoyant surplus to cover budget deficit.
REVENUE IN TROUBLE: Iran's drive to sell state assets in the year to March 2005 has run into trouble, attracting too few buyers as a dispute over the country's nuclear programme heats up.
Some $2.5 billion of receipts were pencilled in to bolster the budget but, already seven months into the Iranian year, only $115 million of state assets have been sold.
Iran had also counted on $670 million in its budget from car import revenue.
But high tariffs and bureaucracy have crippled car imports, permitted for the first time in 10 years, with only a few hundred cars imported so far.
"To realise this figure, we have to open doors and reduce legal restraints on car imports," Gholamreza Tajgardun, deputy head of the state Management and Planning Organisation, told state television on Sunday.
While struggling to realise its privatisation and car import revenue targets, Iran has made significant progress in collecting taxes, a problem area in the past.
"Ninety-five percent of tax revenues are already met," Finance Minister Safdar Hosseini told reporters last week.