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Subsidy Cuts Quadruple Gas Prices in Iran
By WILLIAM YONG
Published: December 19, 2010
TEHRAN — Gasoline prices nearly quadrupled on Sunday and riot police guarded filling stations around the capital as deep cuts in subsidies on fuel and other essential goods took effect.
After midnight on Sunday, the price of subsidized gasoline jumped to 38 cents a liter from 10 cents a liter. Similar increases went into effect for compressed natural gas and diesel fuel, with subsidy reductions for other commodities expected to be phased in gradually.
Security forces with riot shields took positions at gas stations in Tehran, bracing for a possible repeat of the unrest that followed the introduction of gasoline rationing in 2007, but there were no reports of violence.
President Mahmoud Ahmadinejad announced the long-anticipated subsidy reductions in a live television interview on Saturday night, calling the reform “a great victory for Iran.”
Policymakers have described the program as a “rationalization” or “targetization” of Iran’s vast and inefficient subsidies system, but some analysts fear it could lead to high inflation and increase living costs for millions of middle and low-income households.
Mr. Ahmadinejad said that the government was spending $114 billion a year on energy subsidies. “If we can save one-quarter of that, it will amount to a vast economic transformation,” he said.
He said that the prices of water, electricity and natural gas would increase “gradually,” and that the subsidy for bread would also be gradually eliminated. He predicted that the bottom 60 percent of income earners would be better off under the new plan while the wealthier 40 percent would “need to economize.”
etc
http://www.nytimes.com/2010/12/20/wo...20iran.html?hp
By WILLIAM YONG
Published: December 19, 2010
TEHRAN — Gasoline prices nearly quadrupled on Sunday and riot police guarded filling stations around the capital as deep cuts in subsidies on fuel and other essential goods took effect.
After midnight on Sunday, the price of subsidized gasoline jumped to 38 cents a liter from 10 cents a liter. Similar increases went into effect for compressed natural gas and diesel fuel, with subsidy reductions for other commodities expected to be phased in gradually.
Security forces with riot shields took positions at gas stations in Tehran, bracing for a possible repeat of the unrest that followed the introduction of gasoline rationing in 2007, but there were no reports of violence.
President Mahmoud Ahmadinejad announced the long-anticipated subsidy reductions in a live television interview on Saturday night, calling the reform “a great victory for Iran.”
Policymakers have described the program as a “rationalization” or “targetization” of Iran’s vast and inefficient subsidies system, but some analysts fear it could lead to high inflation and increase living costs for millions of middle and low-income households.
Mr. Ahmadinejad said that the government was spending $114 billion a year on energy subsidies. “If we can save one-quarter of that, it will amount to a vast economic transformation,” he said.
He said that the prices of water, electricity and natural gas would increase “gradually,” and that the subsidy for bread would also be gradually eliminated. He predicted that the bottom 60 percent of income earners would be better off under the new plan while the wealthier 40 percent would “need to economize.”
etc
http://www.nytimes.com/2010/12/20/wo...20iran.html?hp
