RandomGuy
12-02-2010, 05:27 PM
Iran spends more money than any other country in the world subsidizing gasoline. It is one of the ways in which the government buys off its people.
That it cannot continue subsidizing gasoline has been apparent to every economist in the world, save Mr. Amedinejad himself.
As the story suggests, ending these subsidies will almost certainly not be popular.
http://www.dailytimes.com.pk/default.asp?page=2010%5C12%5C02%5Cstory_2-12-2010_pg5_29
Iran gasoline price rises 700%
TEHRAN: The price of gasoline in Iran will rise by 700 percent when subsidies are cut, the economy minister was reported as saying on Wednesday, revealing for the first time the cost to motorists of a huge economic overhaul.
President Mahmoud Ahmadinejad hopes to save up to $100 billion a year by phasing out subsidies on gasoline, natural gas, electricity, water and food. But the policy risks upsetting consumers who fear huge price rises.
Riots erupted when the state started rationing subsidised fuel, which can still be bought for 1,000 rials (around $0.10) per litre, and gasoline is one of the most politically sensitive products of all those affected by the subsidy reform.
“The gasoline price will be 7,000 rials (around $0.70) after the implementation of the subsidy reform plan,” Economy and Finance Minister Shamseddin Hosseini was quoted as saying by Kayhan daily. He did not say when the new price would take effect.
Under a rationing scheme, introduced in 2007, a motorist can buy 60 litres of subsidised fuel per month for just 1,000 rials per litre (around $0.11), and beyond that amount they have to pay a “semi-subsidised” price of 4,000 rials. “If we successfully manage to reach our goals by implementing subsidy reform, then there would be no more social class differences, unemployment and investment problems in future,” said Hosseini.
Previously another Iranian official said the final price of gasoline would be “much less” than 10,000 rials (about $1).
Critics of the bill, say it will stoke inflation, which now is running officially at around 10 percent, and might revive the popular street-protest that followed Ahmadinejad’s disputed re-election in 2009. Opposition leaders say the election was rigged, something the authorities deny. The Iranian economy is under pressure from international sanctions imposed on the Islamic state over its disputed nuclear activities.
The United States and its allies fear Iran is secretly developing nuclear weapons under the cover of civilian use. Iran denies the charge and says it needs the nuclear energy to meet its booming demand. reuters
That it cannot continue subsidizing gasoline has been apparent to every economist in the world, save Mr. Amedinejad himself.
As the story suggests, ending these subsidies will almost certainly not be popular.
http://www.dailytimes.com.pk/default.asp?page=2010%5C12%5C02%5Cstory_2-12-2010_pg5_29
Iran gasoline price rises 700%
TEHRAN: The price of gasoline in Iran will rise by 700 percent when subsidies are cut, the economy minister was reported as saying on Wednesday, revealing for the first time the cost to motorists of a huge economic overhaul.
President Mahmoud Ahmadinejad hopes to save up to $100 billion a year by phasing out subsidies on gasoline, natural gas, electricity, water and food. But the policy risks upsetting consumers who fear huge price rises.
Riots erupted when the state started rationing subsidised fuel, which can still be bought for 1,000 rials (around $0.10) per litre, and gasoline is one of the most politically sensitive products of all those affected by the subsidy reform.
“The gasoline price will be 7,000 rials (around $0.70) after the implementation of the subsidy reform plan,” Economy and Finance Minister Shamseddin Hosseini was quoted as saying by Kayhan daily. He did not say when the new price would take effect.
Under a rationing scheme, introduced in 2007, a motorist can buy 60 litres of subsidised fuel per month for just 1,000 rials per litre (around $0.11), and beyond that amount they have to pay a “semi-subsidised” price of 4,000 rials. “If we successfully manage to reach our goals by implementing subsidy reform, then there would be no more social class differences, unemployment and investment problems in future,” said Hosseini.
Previously another Iranian official said the final price of gasoline would be “much less” than 10,000 rials (about $1).
Critics of the bill, say it will stoke inflation, which now is running officially at around 10 percent, and might revive the popular street-protest that followed Ahmadinejad’s disputed re-election in 2009. Opposition leaders say the election was rigged, something the authorities deny. The Iranian economy is under pressure from international sanctions imposed on the Islamic state over its disputed nuclear activities.
The United States and its allies fear Iran is secretly developing nuclear weapons under the cover of civilian use. Iran denies the charge and says it needs the nuclear energy to meet its booming demand. reuters