Iranian President Mahmoud Ahmadinejad has announced the launch of his economic reform plan aimed at overhauling the country's economy by shelving energy and food subsidies, Press TV reported.
President Ahmadinejad said on Saturday that the major plan will start on Sunday and that all subsidies would gradual be removed during a five-year period.
Before the official announcement of the plan, every family member received a sum of 810,000 rials ($80) for two months.
The Iranian chief executive also asked Iranians not to hurry in withdrawing the funds from their bank accounts.
He also vowed that the Iranian government would tackle economic problems such as housing, unemployment and the banking system by implementing the plan.
Under the new rationing system, the price of gasoline will rise four-fold from 1,000 rials (10 cents) per liter to 4,000 rials (40 cents) per liter as of Sunday. Fuel beyond a person's quota -- which is 50 liters per month -- is now sold at 7,000 rials (70 cents) per liter, up from 40 cents.
The Iranian government also said in an announcement that it will also cut subsidies of diesel, kerosene, natural gas and electricity as of Sunday.
The government plans to gradually cut energy subsidies over the space of five years and has promised instead to compensate low income families with direct cash handouts.
Supporters of the plan say it is in line with global financial organizations' recommendations that Iran get rid of a heavily subsidized economy if it wants to solve its economic problems. But, some analysts have criticized the plan, saying it could trigger a hike in prices and stoke up inflation in the country.