Royal Dutch Shell and Total announced that Iran’s precarious financial and political situation coupled with US sanctions against foreign investment in the country mean they will probably not meet Iran’s June deadline for FIDs on South Pars projects.

“We have to recognize that it would be inappropriate to commit billions of dollars of investment at the current period of time until Iran joins the international community," MEED quoted an executive official from Total as saying. Similarly, Shell announced that its technical work on the Persian LNG project continues but is unlikely to be completed before the June deadline.

Concurrently with Tehran’s 13^th International Oil, Gas and Petrochemical Exhibition, petroleum ministry officials have repeatedly stressed that the June deadline will not be extended and threatened to replace Total and Shell with Asian rivals.

What will actually happen as June draws closer remains to be seen. What is certain is that Iran is losing patience with Total and Shell’s delay in making a Final Investment Decision. A significant signpost on this issue will be Nozari’s likely negotiation with high ranking officials from the two companies during the 11^th session of the International Energy Forum to be held from 21-22 April in Rome.

Less than a week after the UAE’s Crescent Petroleum hinted that it had settled its price dispute with Tehran, Iran reiterated its call for an upward revision of the gas price and threatened to use the gas domestically if the dispute is not resolved.

"If the price is not corrected, the gas will not be delivered" Petroleum Minister Gholam-Hossein Nozari said on 16 April, adding that if no agreement is reached, the gas will be transferred over to the mainland for domestic consumption.

Iran was due to start exporting gas to the UAE by mid-2006 but the deal was delayed after several prominent politicians and audit officials pointed out that the deal was based on an oil price of $18 per barrel, even though world prices had risen since the initial contract was signed.

The managing director the National Iranian Oil Refining and Distribution Company, Mohammad-Reza Nematzadeh, said that this year’s budget earmarked for gasoline and gas oil imports is likely to dry up by September. The official explained that the only choices to deal with this shortage are to sell gasoline above the subsidized price or hope that the new parliament (convenes in June) will approve an addendum to the budget.

President Ahmadinejad had held animated debates with MPs on the topic of gasoline imports, even appearing in parliament to defend his position. He had told MPs that the amount set for this year’s imports is unrealistically low and warned them to expect government to require additional subsidies long before the year’s end.

President Ahmadinejad appointed Hossein Samsami Mazraeh Akhoond as caretaker of the Ministry of Economic Affairs and Finance, media reported on 19 April.

Samsami, who replaces outgoing Economy Minister Davoud Danesh Jafari, will take over the post officially on 22 April. This is the first cabinet reshuffle in the new Iranian year.

Samsami is the secretary of the cabinet\'s economic committee, and holds a doctorate in economics from Tehran\'s Shahid Beheshti University, where he is a lecturer at the economics faculty.

According to local media reports of 19 April, the Ministry of Commerce withdrew some $840mn from the Oil Stabilization Fund (OSF) without the necessary green-light from parliament.

The ministry’s move came after parliament rejected a request for a $1.2bn withdrawal from the OSF for imports, with MPs citing inflationary effects.

This is the second time MPs accuse Ahmadinejad’s administration of by-passing them in order to secure funds above those allocated in the yearly budget. Last January, MPs revealed that government has withdrawn $1.2bn from the OSF for gasoline imports without parliament’s approval. The 1386 (March 2007-March 2008) budget bill allocated $2.4bn for gasoline imports, but by January 2008, expenditures in this field had already reached $3.6bn.