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Algeria drafts new 2000 budget after oil price rise

ALGIERS: The Algerian government is preparing a revised budget for 2000 after crude oil prices rose above the projected average $15 a barrel set in the previous budget, the official El Moudjahid newspaper said on Monday.

But the paper did not say whether the windfall would be devoted to cut a rising budget deficit or for more government spending.

"The cabinet is drafting a new finance law for 2000 in light of improving oil prices on the world market," El Moudjahid said. It added that the new draft budget was expected to be submitted to parliament next month for approval.

In November, the pro-government parliament voted for the 2000 budget that projected a deficit of 220 billion dinars ($3.38 billion), or 6.28 percent of a forecast Gross Domestic Product of 3,500 billion dinars ($53.8 billion).

It expected government spending to rise to 1,252 billion dinars from nearly 1,099 billion in 1999.

The figures showed the deficit would swell by 58.53 billion dinars from 1999's estimated deficit of 161.47 billion dinars.

The government had expected to collect 524 billion dinars in taxes from the oil and gas industry in 2000, or 57.7 percent of the total projected revenues of 1,032 billion dinars. In the 1999 budget, revenues were estimated at 937.10 billion dinars.

The approved budget for 2000 is based on average oil price of $15 per barrel, the same level for the 1999's budget.

Oil prices soared after Opec agreed to cut supply in March, 1999, and the Algerian government sees the prices staying within a $22-$28 band following a new agreement by the cartel in March to stabilise prices.

Algeria, an Opec member with a quota of 788,000 barrels per day, relies on the oil and gas industry which accounts for more than 96 percent of the country's foreign currency earnings.

The approved budget projected the dinar's value at 65 dinars per one U.S dollar, the same rate in 1999's budget. The rate had since then rose to around 71 dinars a dollar.-Reuters