Baku, Azerbaijan, Feb. 24
By Fatih Karimov - Trend:
Iran's deputy oil minister Mehdi Rahmati criticized depleting the huge volume of energy sector assets via payment of cash subsidies.
Every year some $12 billion of energy sector's money goes to cash subsidies, Rahmati said, the oil ministry's official SHANA news agency reported.
He further said that the country's national resources are being wasted by payment of subsidies.
The Iranian energy sector companies are suffering from huge debts due to high volume of cash subsidies, he said, adding the National Iranian Oil Company (NIOC) is now owes $50 billion to various companies.
The country's gas, refining and distribution sectors are also in debts due to the payment of subsidies, he added.
The Iranian official argued that the energy sector is so difficult to manage as a result of the depleted capital.
Iran's 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.
The administration of former president Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010.
Earlier Mansour Moazami, the oil minister's advisor said that 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].