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Iran plans to cut subsidized fuel

Source: Press TV

Iran plans to cut rationed subsidized gasoline after the implementation of an economic reform plan to cut food and energy subsidies.

Iranian motorists can buy up to 60 liters of gasoline per month at subsidized price of 1,000 rials (around $0.11)

Iran said last month the economic reform plan would be implemented in the second half of the current Iranian calendar year, which ends in March 2011.

Head of Iran's Transportation and Fuel Management Office Mohammad Rouyanian said on Sunday that the gasoline rationing program, which began in 2007, would continue until the beginning of the economic reform plan, IRNA reported.

"After the implementation of the subsidy plan, gasoline will be sold on free market price," he noted, without saying at what price the gasoline would be sold.

Under the rationing plan introduced in 2007, drivers can buy 60 liters of subsidized fuel per month for 1,000 rials per liter (around $0.11) -- beyond this amount gasoline is available for a price of 4,000 rials.

The government of President Mahmoud Ahmadinejad plans to phase out subsidies over five years and compensate those in need with direct cash payments.

The government says the cuts would make Iran less dependent on gasoline imports; however, economists believe the subsidy reform plan will stoke up inflation by causing a dramatic rise in prices.

... Payvand News - 06/07/10 ... --

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