(MENAFN - Arab Times) Iranian parliamentarians have prepared a draft law to reduce the country's crude exports by up to a third this year in retaliation for western sanctions against Iran's oil sector, the semi-official Fars news agency said on Wednesday.
The bill drawn up by the Iranian parliament's Energy Commission is waiting to be put to parliament for approval, Fars said. Iran's assembly has little say in making policy, where Supreme Leader Ayatollah Ali Khamenei has the last word.
The International Energy Agency (IEA) estimates that Iranian oil exports have slumped from 2.2 million bpd at the end of 2011 to just 860,000 bpd in September 2012 - a fall of 60 percent. Iran's oil minister insists oil exports have not been significantly affected by western sanctions aimed at stopping the country's disputed nuclear activities but has threatened to slash exports if sanctions get tighter. After threatening in early 2012 to cut off supplies to countries in Europe that had already resolved to ban Iranian oil, Iranian legislators are now planning to write some of the reduction in Iran's exports into law. "The government is required to reduce oil exports up to one third compared with the last year (March 20, 2011 to March 19, 2012) in line with the goals of the Fifth Five-Year Development Plan, the Islamic Republic's overall goal of preserving national independence and as a requirement of the present time," Fars cited the one of the bill's paragraphs as saying.
Western nations led by the United States have imposed tough sanctions on the Islamic Republic this year in an attempt to curb its nuclear programme that they say is designed to produce atomic weapons. Tehran says its nuclear plans are peaceful. The US government has focused on blocking Iran's oil exports because it estimates that crude sales provide about half of Iranian government revenues and that oil and oil products make up nearly 80 percent of the country's total exports. Meanwhile, Iranian local airlines have increased their airfares by up to 70 percent amid Western sanctions on the oil and banking system, the official IRNA news agency reported on Tuesday. The report quotes Hamid Reza Pahlevani, head of the country's aviation organization, as saying it authorized airlines to increase the airfares to compensate for the high price of aircraft fuel by Iran's state-owned fuel company.
The hike is the biggest increase in local airfares since the early 1990s. Iranian airliners in recent years had occasionally raised the fares by lower amounts, such as 20 to 30 percent. In May, Iran doubled price of fuel for Iranian airlines, which are mostly state-owned. The move is seen as part of the country's plan to cut fuel and food subsidies, which began in late 2010 amid sanctions on oil and the banking system by the West over Tehran's disputed nuclear program. In the past, the airlines received their imported needs based on the US dollar trading at around 12,260 Iranian rials. In recent weeks, government has been organizing their imported needs based on a new calculation, almost double the previous one. Since the banking and oil embargo in July by the European Union, the rial has fallen drastically in value against foreign currencies.
TEHRAN, Iran: Iran's Central Bank says the country's annual inflation rate hit 24.9 percent in October compared to 24.0 the previous month. The figure, reported by the official IRNA news agency Wednesday, was one of the highest inflation rates since President Mahmoud Ahmadinejad came to office seven years ago. They add to a bleak economic picture which conservatives are pinning on Ahmadinejad, who they supported in his disputed 2009 re-election. Iran's national currency, the rial, lost about 50 percent of its foreign exchange value in less than a week in October, hitting an all-time low of 35,500 versus the dollar. It currently stands at about 32,000, and was close to 10,000 in early 2011. The decline has been blamed on a combination of government mismanagement and sanctions imposed over Iran's nuclear program.