Iranians Feel Pinch of Falling Oil Prices

Many fear living conditions will deteriorate further if parliament approves president’s plan to cut energy subsidies. Last October, Iran’s central bank head Mahmoud Bahmani warned of hardships ahead as falling oil prices resulted in a 54 billion US dollar reduction in the country’s foreign exchange earnings.

Back then, oil cost just less than 70 dollars a barrel, and only the most pessimistic of economists could have predicted that the price would plunge by almost 50 per cent.


The global economic crisis, which has compounded the problem, has overridden all other equations, assessments and predictions.

Yet some officials have remained defiant in the face of the plunge in the oil price, which at its highest in the middle of last year stood at 147 dollars.

Iranian vice president Parviz Davoudi said in December that it would have no impact on Iran, insisting that the country with its “independent economic system” would flourish.

However, experts predict that the severe drop in prices will be devastating for Iran’s economy, which relies heavily on oil revenue. According to official figures, the Tehran authorities derive 70 per cent of its revenues from sales of crude.

Payvand