...

Iran pays $52 bln for cash subsidies

Business Materials 3 March 2014 11:09 (UTC +04:00)

Baku, Azerbaijan, March 3

By Umid Niayesh - Trend:

Iranian administration has paid some $52.18 billion (based on official currency rate of 24,916 rials per USD) as cash subsidies for people so far, head of parliament Research Center, Kazem Jalali said, the country's IRNA news agency reported on March 3.

The Iranian government implemented the first stage of the subsidy reform plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies.

The plan allows the government to gradually slash subsidies on fuel, electricity and certain goods over the course of five years, with low-income families being compensated with direct cash hand-outs. The subsidy reform plan pays 45,500 rials (about $18) to Iranians, eliminating subsidies for fuels and some commodities.

The Iranian parliament approved the government implementing the second phase of the subsidy reform plan at the beginning of the second quarter of the next Iranian calendar year (to start on March 21), Iranian media outlets reported on Feb. 4.

Implementation of the subsidy reform plan in the next year will likely force the government to double fuel prices.

Jalali said that so far the paid cash subsidies are some $16 billion more than government incomes via increasing energy carriers` prices.

President Hassan Rouhani's administration has set the goal of 519 trillion rials, (about $20.9 billion) of the government's income from implementation of the subsidy reform plan in next year's budget bill. The government's income from the subsidy reform plan is expected to be around $11.26 billion in the current year.

Fars News Agency quoted the Member of Parliament Ahmad Tavakoli on Jan.28 as saying that in order to achieve the set goal of $20.9 billion, the government needs to double fuel prices, which will not be affordable to citizens.

On Feb. 26, Rouhani remarked that the prices for energy carriers will increase slowly in the next Iranian calendar year.

Edited by C.N.

Latest

Latest