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Iran's manufacturers can't pay utility bills, get cutoff

Business Materials 10 June 2012 13:58 (UTC +04:00)

Azerbaijan, Baku, June 10 / Trend M. Moezzi /

Some of industrial units in Iran have had their electricity and gas cut off because they can't pay their bills.

The businesses have been unable to keep up with the higher costs, as much as 10 times higher, for electricity and gas ushered in by Iran's Subsidy Reform Plan, Fars news agency reports.

Hossein Sassani, head of the Confederation of Iranian Industry, said efforts are being made to get the affected units' power and gas back on.

Started in December 2011, the subsidy program pays out $37 to each Iranian while eliminating subsidies for energy carriers and some commodities. Thirty percent of the income from the subsidies reform program was to be routed to the industrial sector to help offset higher energy costs. That hasn't happened.

In late April, Iran's Minister of Economic and Financial Affairs, Seyed Shamseddin Hosseini, defended the government's support for industry in its subsidies reform program. At that time Hosseini said Iran's industry, transportation and agriculture sectors have received about $8 billion in cash help since the targeted subsidies program started.

The second phase of the reform program was recently approved by Iran's Majlis (parliament). Although it hasn't gone into effect yet, this new phase will bring a new round of higher prices for energy carriers.

The subsidies program, which was supposed to pay for itself, has a $16 billion deficit.

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