Iran’s Oil Minister Bijan Zangeneh on Tuesday rejected earlier comments by officials that the budget for the next Iranian calendar year (21 March 2016-2017) has been devised by considering that the country will sell each barrel of its oil at $40. 

Zangeneh told reporters that no specific base price for oil has been yet agreed on in the government.  “The price that will be decided on will be the closest to the market trend,” he said.

Earlier on Sunday, the media quoted Mansour Moazzami, a top adviser to Zangeneh, as saying that the base price in the next year’s budget has been set at $35.

Moazzami added that the next year’s overall oil sales are expected to reach $22 billion, adding that tax revenues could also amount to Rials 850 trillion ($28 billion).

Oil revenues make up the lifeline of the Iranian economy. The budget for the current year (ending 21 March 2016) is based on speculations that the country would sell oil at $70 per barrel.

However, the plunging prices of oil are expected to prevent a certain share of the revenues from being materialized.

Iran’s media reported on Saturday that the price of the country’s heavy crude oil had plunged below $30 per barrel for the first time in almost 20 years in mid-December trade.

Shana news agency – affiliated to Iran’s Oil Ministry – said in a report that the country had sold heavy crude at $29.4 per barrel in the week ending 18 December.

The report added that Iran had also sold its light crude at $35.1 per barrel over the same period.

Both figures show major drops from normal levels of the previous months. The average price of Iran’s heavy oil stood at $48.6 since March, added Shana.  The average price of the light oil stood at $50.6.

Heavy crude and extra heavy crude streams account for most of the country's oil production, at approximately 45 percent.

Officials in Tehran had earlier said they expected the price of oil – which provides the lifeline of the Iranian economy – to plunge below $30 per barrel.

“Oil producing countries will suffer serious blows under the current conditions and with [further] plunges in prices of this product (oil),” said Iran’s First Vice President Es’haq Jahangiri on 19 December.

For a country that has devised its budget based on $100 for each barrel it expects to sell, it will be hard to change the calculations to $30 per barrel, Jahangiri added.

Nevertheless, the country’s Finance Minister Ali Tayyeb-Niya later emphasized that Iran had provided the required preparations to deal with the economic impacts of oil prices even as low as $30 per barrel.

Tayyeb-Niya said a large part of those preparations focuses on the implementation of a comprehensive national taxation program which is already on the agenda of the government.