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Iranian speaker criticizes administration’s approach on subsidy reforms

Business Materials 4 May 2012 16:37 (UTC +04:00)

Azerbaijan, Baku, May 04/ Trend F.Milad/



The Iranian parliamentary speaker has criticized the government's approach toward subsidy reforms, stating that the government wants to gain liquidity for paying cash subsidies by irregularly increasing fuel prices.

"The government wants to raise gasoline price to 20,000 rials, double gas price and triple diesel price, in order to gain liquidity to pay cash subsidies," Ali Larijani was quoted by the Mehr News Agency as saying.

"We have problems they want to do the job through increasing fuel prices. Implementing the reform plan should not add to costs or inflation," he stressed.

Between February 2011 and February 2012, the government earned 510 trillion rials (some $41.6 billion) through implementing the Subsidy Reform Plan.

The second phase of implementing the plan has envisaged removing subsidies of some three million Iranian families. The Iranian government is planning to pay more cash subsidies to the economically vulnerable strata and cut subsidies of the well-off families.

The subsidy reform plan allows the Iranian 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 handouts.

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