Press TV - The Iranian Parliament has approved a bill presented by President Mahmoud Ahmadinejad to eliminate the subsidy on basic commodities.
The president presented to the parliament an economic reform bill on Tuesday to cut costly energy subsidies and redistribute a larger portion of the sum among citizens.
The bill is part of an economic reform plan which the government claims would enable it to reduce dependence on oil revenues and tackle the country's root economic problems, including rising inflation.
Now that the motion has been approved by the majority of Majlis lawmakers, it will be put to vote ahead of other bills.
According to the bill, part of the sum will be spent on creating job opportunities, expanding the public transportation system and raising non-oil exports.
If the bill is approved, prices of vital supplies such as gasoline and electricity will dramatically increase, the deputy director of Iranian Central Bank, Ramin Pashaifam was quoted Tuesday by Etemad newspaper.
He added that inflation would also rise by a further 11 to 15 percent. The inflation rate has reached almost 30 percent in recent weeks.
President Ahmadinejad told the parliament that cheap fuel and utilities mainly benefited people with higher income, adding that the first goal of the plan was to 'apply justice and eradicate discrimination'.
The president stressed that prices should become 'real', saying sixty percent of the money saved following the adoption of the bill would be used to enhance the purchasing power of people with low or average incomes.
The proposed bill authorizes the establishment of a special fund, headed by the president, to supervise the implementation of the plan.
Iran's economy is vastly dependent on oil as it accounts for 80 percent of the country's foreign exchange revenues.
The sharp downward spiral of oil prices has prompted economists to predict that Tehran will face a considerable budget deficit within the space of a few months.
President Ahmadinejad previously attempted to ease concerns about the impact of falling oil prices on the economy by saying that the country could survive for three years even if the price of oil dropped to zero.
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