Cash subsidies a hurdle on the way of oil projects - Iranian oil ministry
Tehran, Iran, April 19
By Mehdi Sepahvand - Trend:
Deputy Oil Minister of Iran Mansour Moazami has said that the large sum of petrodollar going into monthly cash subsidies to Iranian individuals has crippled funding the country's oil projects.
Whereas according to the 5th National Development Plan the annual investment in oil projects was going to be $50 billion, the investment through the past four years has gone barely beyond that amount [$50 billion], Moazami stated.
The huge sum of money going into cash subsidies has suffocated the oil industry and something has to be done about it, the official said, SHANA news agency reported April 19.
He pointed out that every month 35 trillion rials ($1.2 billion) oil money goes into the cash subsidies, reiterating that because of the subsidies the oil ministry's projects are all let down.
Last year President Hassan Rouhani said cash subsidies impose about $392 million deficit in the budget per month for administration.
The administration of former president Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010.
The subsidy reform plan is aimed at easing pressure on state finances by cutting tens of billions of dollars from government subsidies on food and fuel. The government pays cash to citizens as compensation for increased prices by cutting subsides.
Iran's oil export revenue is estimated to reach $23 billion in 2015 without achieving a comprehensive nuclear deal with P5+1.
In early 2015 the International Monetary Fund estimated that the country's oil export for 2014 was 1.24 million barrels per day.