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Iran plans fuel subsidies cut on path to phase-out
Wed, Oct 15, 2008
Reuters

TEHRAN, Oct 14 (Reuters) - Iran plans to gradually cut from the next Iranian year the amount of heavily-subsidised gasoline motorists can buy and completely eliminate subsidies by 2011, an Iranian official said in comments published on Tuesday.

"We should go towards making the prices real and eliminate the subsidies," Mohammad Rouyanian, head of Iran's fuel management and transportation headquarters, was quoted as saying by the Aftab daily. Other newspapers carried similar reports.

Iran is the world's fourth-largest exporter of crude, but lacks enough refining capacity to meet domestic gasoline needs, forcing it to imports large amounts which it then sells at subsidised prices, burdening the budget.

To curb soaring consumption, it launched rationing of subsidised gasoline in June last year, allowing motorists to only buy 100 litres per month at the price of 1,000 rials (around S$0.16) per litre.

The allocated amount was later increased to 120 litres per month after many drivers complained. Purchases above this limit cost four times more.

"Concerning the government's policies of ending fuel subsidies by 2011, from next year the gasoline allocation for private cars will gradually be decreased," Rouyanian said, referring to the 2009-10 Iranian year starting in March.

(Reporting by Parisa Hafezi; Writing by Fredrik Dahl; Editing by William Hardy)

 

 
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