By M.A. Saki

Budget bill and national interests

December 26, 2018

TEHRAN - Finally the administration submitted the national budget bill to parliament for the next year which starts on March 21, 2019. As Mohammad Reza Nobakht, director of the Budget and Planning Organization, had announced on Dec. 6, there was no increase in fuel prices, including gasoline, in the 1398 budget.

Now we should wait and see what the Majlis would decide about energy prices including electricity, water, and more importantly gasoline.

Rouhani’s administration has only a little time to reform the fuel subsidy system. So far, more than five years of his two four-year presidency have passed without making a serious effort to reduce the ever-increasing gasoline consumption.

It is true that his government has faced renewed sanctions by the Trump administration despite the nuclear deal, Rouhani only has two more times to present budget bills to the Majlis.

When studying the current year’s budget in the winter of the 2018, Majlis opposed a 50 percent increase in gasoline price. There is a little chance that this time the Majlis make a different decision because a majority of MPs do not know economics. Most of them are mostly focusing on reelection in the next year’s parliamentary polls.

In view of Iran’s economy, one of the main approaches to build a solid economy in the face of cruel and illegal sanctions is to gradually put an end to unnecessary subsidies. This is essential in view of the fact that energy subsidies have always acted as a stroke to the national economy.

Currently, the administration is allocating about $14 billion to gasoline subsidy. To find more about the depth of this ill-fated policy, it is enough to compare this figure to the amount that is spent on research, which serves as the backbone of developed economies.

Officials must feel quite self-assured that this policy will lead to more extravagant waste of fuel. If gasoline consumption is now about 100 million liters per day, it will reach higher when the Majlis is going to study the budget bill for the year 1399.

While the country is facing severe droughts and farmers are losing their jobs and sources of income, continuing to subsidize water, electricity, and gasoline is against the basic principles of economy and national interests.

PA/PA

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