Iranian energy minister: Subsidy reform plan’s second phase will be implemented

Business Materials 18 December 2012 18:13 (UTC +04:00)

Azerbaijan, Baku, Dec. 18/ Trend, G. Mehdi/

Iranian Energy Minister Majid Namjoo has said that the current administration has decided to implement the second phase of the subsidy reform plan, ISNA reported.

The subsidy reform plan pays out $37 to Iranians while eliminating subsidies for fuels and some commodities.

When the plan started in December 2010, it was expected to cause about $32 billion in liquidity. But greater demand for cash subsidies and government money borrowed from the central bank to pay for the subsidies led to $45 billion in liquidity.

On October 7, the Iranian parliament (Majlis) approved a single-urgency bill to cancel the implementation of the second phase of the subsidy reform plan.

On May 15th, the Majlis decided to increase the amount of subsidies to families in cash or in kind, a move which allowed the administration to begin the implementation of the second stage of the subsidy reform plan.

Accordingly, the administration approved the increase of the per capita cash subsidies by 275,000 Rials to 610,000 Rials.