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Prices of energy carriers in the next Iranian fiscal year (March 2017-18) will not increase. said Mohammad Mehdi Mofateh. Spokesperson for the Majlis Planning and Budget Commission.
Government revenues from implementing the Subsidy Reform Plan are forecast at approximately 48 trillion rials ($12 billion) for the next fiscal. the same as in the present fiscal. said the official. the Oil Ministry`s Shana news agency reported on Monday.
This means that the government is not allowed by law to increase its budget by cutting back on subsidies for energy. such as gasoline. diesel. gas. kerosene and electricity.
The decision was made after a meeting between Mohammad Baqer Nobakht. head of the Planning and Budget Organization of Iran who is also the government spokesperson and members of the parliamentary commission on Sunday.
According to Nobakht. the cash subsidy scheme has created a big hole in government finances. At least 50% of the revenues (from subsidy reforms) must be spent on the cash subsidy payments. Nobakht said earlier this month.
Recent government data shows $60 billion has been paid in cash subsidies under the so-called Subsidy Reform Plan ever since the controversial scheme was launched seven years ago.
The plan. launched in 2010 by former president Mahmoud Ahmadinejad. removed costly subsidies on food and fuel and replaced it with a monthly 455.000 rials ($11) in cash payment to almost all Iranians.
Iran has a population of 80 million and the government says 77 million people receive the cash subsidies. costing the treasury almost $850 million per month.
