BW:  Iran’s parliament finalizes budget bill

Iran’s parliament has given final approval for a $368 billion budget bill for the current Iranian calendar year, bowing to the hardline president’s full request despite concerns it includes measures that would stoke inflation.  The final approval Monday came after lawmakers last week had initially approved a $347 billion budget for the 12-month period from March 2010 to March 2011, slashing $20 billion of the $40 billion President Mahmoud Ahmadinejad had requested as direct payments to the neediest Iranians to offset the impact of a phased fuel and food subsidy cut.  Several Iranian newspapers, including the economic daily Donyae Eqtesad which reported the budget’s approval on Tuesday, did not explain how the government planned to come up with the additional $20 billion.

Iran, a key OPEC exporter, earns up to 80 percent of its foreign revenue from oil sales. The new budget is based on oil at $65 per barrel while oil is currently in the range of about $80 per barrel, a level the U.S. Energy Department’s statistical arm projects could hold for the rest of the year. The budget bill must still be approved by a constitutional watchdog before becoming law, but its passage with the full amount requested by Ahmadinejad was a reflection of the hardline government’s lobbying power.  Subsidies consume about 30 percent of the government’s budget, or $100 billion, and Ahmadinejad has come under heavy criticism that he squandered the country’s oil wealth on populist projects aimed at winning him support among poorer Iranians at the expense of the economy.  See also RFE.

WSJ:  Iran and Pakistan Sign Pipeline Deal

Iran and Pakistan signed a deal in Turkey on Tuesday paving the way for construction to start on a much-delayed natural-gas pipeline connecting the two nations in a move that has been opposed by Washington as undermining sanctions efforts against Tehran.

Pakistan has argued the pipeline, which will connect Iran’s South Pars gas field with Pakistan’s Baluchistan and Sindh provinces, is crucial to averting a growing energy crisis that is already causing severe electricity shortages.

“It’s in our legitimate economic interests,” said Abdul Basit, a foreign ministry spokesman. Construction on the pipeline should begin this year and be operational by 2014, he said.

Iran and Pakistan signed an initial pact in June last year and reached agreement on pricing in September. Under the terms of the final deal signed Tuesday, Iran will supply 750 million cubic feet a day of gas to Pakistan for 25 years.

AFP:  China takes over from West as Iran’s main economic partner

China has emerged as Iran’s top economic partner, investing heavily in the energy sector and filling the gaps left by Western firms forced out by international sanctions.In 2009, China became Iran’s premier trade partner, with bilateral trade worth 21.2 billion dollars against 14.4 billion dollars three years earlier.The figures confirm the exponential growth in commercial ties between the two countries, which were almost non-existent 15 years ago, when trade volumes amounted to just 400 million dollars.