Oil price went down and therefore the government must fix a proper oil price in the state budget, Azerbaijani President Ilham Aliyev made this statement at the enlarged session of the Cabinet of Ministers devoted to the results of quarter 3, 2014 on October 8, 2014.
President said a certain part of the state budget (about 50% according to the semi-annual results) is ensured at the expense of transfers from the Oil Fund.
“We have already mentioned that. We will say it again to avoid any problems related to the budget execution. Azerbaijan has created a big economic and financial potential and I do not believe that oil price reduction could seriously affect us. But in any case we must be ready to that and build our plans in accordance with that, because the world economy has not overcome the crisis yet,” Ilham Aliyev added.
Azerbaijani President also added that there are other factors affecting reduction of oil prices. “We must take all that into account and work out our investment programs in accordance with that. I would like to emphasize again that the instructions have been already given,” he said.
President also added that first of all social issues, such as social security, military expenses and infrastructure projects, will be solved.
At the end of September 2014 Cabinet of Ministers adopted the draft of state budget for fiscal year 2015 at the closed session and submitted it for the consideration of the presidential administration. There is no information yet what oil price the state budget for fiscal year 2015 is based on. This year the state budget envisages the oil price of $100 per barrel. According to Turan, the government based its calculations for fiscal year 2015 on the oil price of $90.00 per barrel.
The governmental officials told Turan’s correspondent that there are no threats for the budget, even if the oil price is below $90.00 per barrel. If needed, the budget could be revised in the middle of the year and transfers from the Oil Fund could be increased. Or one needs to ensure efficient use of budgetary resources, this is also one of the ways to reduce the budgetary incomes,” said the same source.
