Iran president says 'no logic' in fuel subsidies

Iran president says ‘no logic’ in fuel subsidies

/ 02:36 PM August 28, 2024

Iran president says 'no logic' in fuel subsidies

Iran’s President Masoud Pezeshkian addresses parliament during a session to approve his new cabinet appointments in Tehran on August 21, 2024. (Photo by ATTA KENARE / AFP)

Tehran, Iran — Iranian President Masoud Pezeshkian said on Tuesday there was “no logic” in the Islamic republic’s fuel subsidies, but stopped short of declaring any intentions to change the government’s long-standing policy.

Fuel prices in Iran — one of the top oil producers globally — are among the world’s lowest, and a surprise increase in 2019 sparked protests by angry citizens.

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Pezeshkian, who was sworn in late last month, said in a video shared by Iranian media that “there is no logic in (the government) buying petrol with a free-market dollar rate and selling it to people at a subsidized rate.”

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In the video posted on the Telegram channel of the Etemad daily, the 69-year-old president urged “scientists and economists” to address the issue.

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Pezeshkian criticised the subsidy policy as economically inviable and complained that it takes away public funds from other areas like pension payments or wheat purchases.

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On Thursday Pezeshkian’s Oil Minister Mohsen Paknezhad said the government was not considering “price solutions to solve the petrol disequilibrium”.

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On the campaign trail, opponents of Pezeshkian had accused him of seeking to increase fuel prices. A sudden announcement of a nearly 200-percent increase in 2019 triggered nationwide protests.

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Pezeshkian’s campaign manager Ali Abdolalizadeh, citing experts, had said the current price for a litre of petrol, 30,000 rials (0.05 cents), should go up to about 500,000 rials.

Years of Western sanctions have battered the Iranian economy, spurring domestic discontent.

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The Islamic republic was the world’s seventh-largest crude producer in 2022, and has the third-largest proven oil reserves behind Venezuela and Saudi Arabia, according to the United States Energy Information Administration.

TAGS: fuel subsidies, Iran, Masoud Pezeshkian

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