Iran subsidy reform wins final approval

Ahmadinejad wants to save up to $100 billion annually from subsidies on gasoline, natural gas, electricity, water, food, health and education.

Iran subsidy reform wins final approval

Iran's top legislative body has approved a plan to phase out energy and food subsidies, its spokesman was quoted as saying on Wednesday, a move that would ease a heavy budget burden on the major oil producing country.

President Mahmoud Ahmadinejad wants to save up to $100 billion annually from subsidies on gasoline, natural gas, electricity, water, food, health and education.

The Guardian Council's final approval of the plan came after Iranian media last week said Ahmadinejad and parliament had reached a compromise on control of the money the state is expected to save through the bill.

Removing subsidies could make Iran less vulnerable to any Western sanctions on, for example, gasoline imports over its nuclear energy programme.

"The Guardian Council approved it in its last session," council spokesman Abbas-Ali Kadkhodai told the semi-official Fars News Agency. The 12-member body of senior clerics and Islamic jurists must approve legislation passed by MPs.

"The Guardian Council studied the amended bill which was sent by parliament ... and found no contradiction with Sharia (Islamic law) and the constitution," he said.

State radio also carried the report.

Critics believe the government's subsidy reform plan will hurt many ordinary Iranian people already struggling to cope with rising consumer prices. The official inflation rate stands at around 7 percent, down from a 2008 peak of nearly 30 percent.

State media have said the government will open bank accounts for 36 million people to give them cash to compensate for the higher food and energy prices.


Reuters

Last Mod: 13 Ocak 2010, 15:06
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