The Iran Project

Iran plans to wean budget off oil income by next year

Bandar Abbas Oil Refinery

Al-Monitor | : The Iranian government has decided to eliminate its budgetary reliance on oil sales for the fiscal year beginning in March 2020. The administration kickstarted the policy by reducing gasoline subsidies on Nov. 16. This measure is meant to ease budgetary pressures caused by the US maximum pressure campaign on the country’s economy, in addition to helping lower-income groups by increasing their cash subsidies.

However, the recent protests across the country proved implementing the policy won’t be easy.

Oil funds, especially during the past half-century, have always been a major contributor to Iran’s public budget and expenditures financing. In fact, they paid for 46% of total state costs between 1971 and 2018.

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