Iran bases budget on oil price of $37.5 per barrel

TEHRAN, Jan. 4 (Chinese media) -- Iran's Oil Minister

Gholam-Hossein Nozari said here on Sunday that Iran's government would base its

budget for the next calendar year on oil prices of over 37.5 U.S. dollars per

barrel, Iran's satellite Press TV reported.

"The government and the parliament have agreed on

setting an oil price of 37.5 U.S. dollars a barrel in the next year's budget

bill," Nozari said, adding that "this price has been set in view of the oil

market fluctuations. We should also be careful not to lose our main customers."

The next Iranian calendar year starts on March 21,

2009.

Due to the sharp downward spiral in oil prices, it is

expected that Tehran's new budget set-up falls short in the country's strategic

economic plans.

Crude oil income accounts for 80 percent of Iran's

revenue, which makes the country's economy vulnerable to such oil price

fluctuations.

Iran's President Mahmoud Ahmadinejad has refuted the

claims saying that falling oil prices and the due fluctuations will have serious

impact on the country's economy, maintaining that "even if they reach 5 dollars

a barrel, the country's economy will not be affected."

After being elected as Iranian president in 2005,

Ahmadinejad vowed to reduce Iran's dependency on oil revenues and reiterated the

claim as a part of his new economic reform plan in mid 2008.