|Iran set to implement 2nd phase of subsidy reform||
TEHRAN - President Hassan Rouhani says the second phase of the subsidy reform plan is likely to begin by Friday.
Rouhani made the announcement in a meeting with the law enforcement force commanders in Tehran on Saturday.
“We have called people to register for receiving cash subsidies. The law stipulates that those who do not need cash subsidies should give up voluntarily. It is hoped that people meet their responsibilities,” Rouhani said, adding once the registration process is terminated, the government will start implementing the second phase of the plan.
Registration to identify families, who are eligible to receive cash subsidy, started on April 9 and will run till April 20.
The administration of president Mahmoud Ahmadinejad implemented the first stage of the subsidy reform plan toward the end of 2010 in an attempt to wean the country off food and fuel subsidies.
In the first stage the government paid 45,500 rials (about $18) to citizens to compensate for a partial cut of subsidies.
It is estimated that the government will acquire 480 trillion rials (about $19.3 billion) in the current Iranian calendar year (March 2014-March 2015) in revenues through the implementation of the second phase of the economic reform plan.
On February 16, MPs approved a bill according to which cash payments in the second phase will only be given to low-income families.
The parliament gave the administration authority to decide the amount of cash subsidy payments that will be given to the target groups.
Government owes $7.8b to power sector
Elsewhere in his remarks, Rouhani said the administration owes 200 trillion rials (about $7.8 billion) to the power sector.
“We inherited the debt from the former administration, but we could settle just a small percentage of the debt,” Rouhani added.
He said electricity bills will be increased at a very low rate in the second phase.
Subsidy reform plan won’t lead to high inflation
An advisor to President Rouhani said on April 13 that the implementation of the second phase of the subsidy reform plan will not lead to a sharp rise in prices.
Although fuel prices rose by 600 percent in the first phase, the inflation rate increased by 10 percent, Mohammad Kordbacheh said in an interview with the ISNA news agency.
“Fuel prices are planned to be increased by 60 percent on the average. Therefore, it will not lead to a hike in the inflation rate.”
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