19 Dec 2010

Iran to cut subsidies of food and fuel

12:06 pm on 19 December 2010

Iran is cutting the state subsidies which allow Iranians to buy cheap food and fuel.

President Mahmoud Ahmedinejad says Iran can no longer afford the cost, which amounts to $US100 billion per year.

The government plans to withdraw them completely by 2015.

State television announced on Saturday night that the price of gasoline will rise from 1000 rials (about 10 US cents) per litre for 60 litres per month, to 4000 rials per litre. Beyond 60 litres, the price will be 7000 rials.

The announcement said further price rises for other essential subsidised items, would be disclosed later.

In a live TV interview, President Ahmadinejad said the government would seek to soften the price rise by selling the first 50 litres of gasoline at the existing price for an extra month.

Iran uses some 61 million litres per day, according to the Oil Ministry.