Iran denies claims over gas price treble

Iran denies claims over gas price treble

DUBAI - Reuters
Iran denies claims over gas price treble

A tanker docks at oil refineries in Yokohama in this photo. Japanese refiners have secured a clause in annual contracts with Iran that exempt them from an EU embargo. REUTERS photo

Iran’s government denied yesterday it would treble the price of gasoline as part of subsidy reforms that have been commended by the IMF but caused anger at home among a population struggling under Western trade sanctions.

In a statement carried by the Fars news agency, the office of President Mahmoud Ahmadinejad said talk of a threefold price increase - broadcast on May 4 by Ahmadinejad’s bitter critic, the speaker of parliament - was “entirely false”.

Speaker Ali Larijani had said the government was looking to triple petrol prices and to double the cost of natural gas as part of a further stage of efforts to reduce spending on subsidies while trying to target relief at the poorest Iranians.

 In the statement, Ahmadinejad’s office said: “Comments published saying the government has decided to sell gasoline at 2,000 toman per litre are entirely false.”

That price, equivalent to 20,000 rials, compares to the 7,000 rials - roughly 57 U.S. cents at the official rate - which Iranians now pay for petrol once they use up a 50-liter monthly allowance to purchase fuel at 4,000 rials.

The presidency said: “The government has never sought such figures in any of its programmes and it has and will continue to put all necessary information directly to the people.”

The government implemented the first-stage of its Targeted Subsidies Plan towards the end of 2010 in an attempt to wean the country off food and fuel subsidies. At the time, Ahmadinejad called it the “biggest economic plan of the past 50 years”.

On May 5, a parliamentary committee rejected its plans for the second stage of subsidy reform.

Critics have accused Ahmadinejad of pushing through a program of wasteful public spending that has caused soaring inflation and of using the reforms for his own political gain.