Iran to give cash in compensation to millions when subsidies end

Parliament last month backed government proposals to end subsidies on basic goods ranging from gasoline to wheat and rice.

Iran to give cash in compensation to millions when subsidies end

Iran plans to open bank accounts for 36 million people, about half its population, to give them cash in compensation for higher food and energy prices when subsidies are phased out, media reported on Sunday.

Parliament last month backed government proposals to end subsidies on basic goods ranging from gasoline to wheat and rice.

The government says hefty fuel subsidies benefit mainly the wealthy and that low-income families will be compensated.

The business daily Sarmayeh said the cash compensation would total up to 170,000 rials ($17) per person and would cover 70 percent of the population, including children.

Social Welfare Minister Nadali Olfatpour said his ministry has been told to open bank accounts for 36 million people in five social brackets, the daily Jam-e Jam said.

"Iran Statistics Centre will be putting at our disposal the information relating to the brackets and there will be subsidies allocated for the first five social brackets which includes around 8 million families," Olfatpour said.

Sarmayeh said a family of four with a monthly income of about $400 would receive $68 under the plan.

"We will wire the money into your account ... it is not necessary to go and buy whatever you need on the first day," it quoted Ahmadinejad as saying.

Iran is the world's fifth-largest oil exporter but has too little refining capacity to meet its gasoline needs, forcing it to import large volumes.

"Sanctions ... may increase the cost of trade but we are trying to find new ways to bypass such restrictions," ISNA news agency quoted Economy Minister Shamseddin Hosseini as saying.

The subsidy bill needs to be approved by the watchdog body, the Guardian Council, to become law.


Reuters

Güncelleme Tarihi: 02 Kasım 2009, 08:46
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