Subsidies in Iran

Last updated
From one of the lowest energy intensity users in the world in 1980, Iran has become one of the major consumers of energy with very high energy intensity. Rudeshur.jpg
From one of the lowest energy intensity users in the world in 1980, Iran has become one of the major consumers of energy with very high energy intensity.

The economy of Iran includes a lot of subsidies. [2] Food items, such as flour and cooking oil, are subsidized, along with fuels such as gasoline. [3] However cutting subsidies can cause civil unrest. [4]

Contents

The Iranian targeted subsidy plan (Persian : طرح هدفمندسازی یارانه‌ها), also known as the subsidy reform plan, was passed by the Iranian Parliament in 2010. The government described the subsidy plan as the "biggest surgery" to the nation's economy in half a century and "one of the most important undertakings in Iran's recent economic history". [5] The goal of the subsidy reform plan is to replace subsidies on food and energy (80% of total) with targeted social assistance, in accordance with a Five Year Economic Development Plan and a move towards free market prices in a 5-year period. [6] The subsidy reform plan is the most important part of a broader Iranian economic reform plan.[ citation needed ]

According to the government, approximately $100 billion per year is spent on subsidizing energy prices [7] ($45 billion for the prices of fuel alone) and many consumable goods including bread, sugar, rice, cooking oil and medicine. [8] [9] [ better source needed ] However, some experts believe direct subsidies are about $30 billion, depending on oil prices. [10] [11] [ better source needed ]

The subsidy system has been inherited from the Iran–Iraq War era but was never abolished. Iran is one of the largest gasoline consumers in the world, ranking second behind the United States in consumption per car. [12] The government subsidy reform has been years in the making, for reasons which are unclear. [1] [13] [14] [15] Iran's Supreme Leader has backed the government’s subsidy reform plan. [16]

Objectives

According to the Iranian government, $100 billion is spent on subsidies each year. The reform plan aims to encourage public transport by decreasing fuel subsidies. Mercedes bus and Samand.jpg
According to the Iranian government, $100 billion is spent on subsidies each year. The reform plan aims to encourage public transport by decreasing fuel subsidies.

Iran spends the largest share of GDP on fossil fuel subsidies in the world. [1] [17] Many Iranian experts agree that these unsustainable subsidies encourage waste among goods, including in the production sector, ranging from gasoline to bread that must be stopped and the only way to do that is to redirect subsidies.[ citation needed ]

The stated goal of the subsidy reform is "to rejuvenate Iran's economy, increase productivity, give it a new footing and bring it out of the slump it has been in for so long".[ citation needed ] Concretely, the government plans to replace the subsidies with targeted social assistance. Consequences of the economic reform plan are that Iran will be less vulnerable to US sanctions because it will reduce fuel imports. [18] [19] The reform plan will also save money for the Iranian people because it will end a multibillion-dollar-a-year contraband (17% percent of fuel production in Iran is smuggled abroad daily). [20] [21] Due to subsidies, Iran had long had one of the cheapest gas prices in the world, 10 cents per liter or 40 cents per gallon.[ citation needed ]

Implementation of the plan will reduce waste and consumerism. In fact, according to official data, the higher income strata of the population has enjoyed the same subsidies as the poor until now. [22] [ better source needed ] On the other side, subsidies reduction will reduce air pollution by reducing car traffic in Tehran. [22] Finally, the subsidy plan will increase social justice through targeted social assistance. [23] According to official data, the richest tenth of households benefits 12 times more from gasoline subsidies than the poorest tenth. [24] Overall, implementation of the plan will increase productivity, efficiency, competitiveness of Iran's economy, economic growth, oil exports and per capita income (all other things being equal). [22] [25]

Implementation

Iran wants to save up to $100 billion on subsidies within three to four years. Iran subsidies reform plan2.png
Iran wants to save up to $100 billion on subsidies within three to four years.

For implementation of the bill, an entity has been established as a duly authorized governmental company under the name "Targeting Subsidies Organization". [26]

The amount saved by the government, will be distributed as follows: 50% towards the poorest strata of Iranian society; 20% at the government's disposal (to compensate for increased costs or as safety net); and the remaining 30% will be directed towards improving the efficiency of the utility, fuel and energy production infrastructure, public transportation development, industry and farming.[ citation needed ]

The plan will commence with energy, fuel and utilities in the first year and consumable goods will start in the second year. The start of the cuts will coincide with the beginning of the second half of the Iranian year on Sept. 23, 2010. [27] At that time, the 2007 Gas rationing plan will come to an end.[ citation needed ]

Budgeting

In March 2010, the Iranian Parliament approved a $347 billion budget, in which the allocation from subsidies and the oil price were set at $20 billion and $65 per barrel, respectively. [28] [29] According to the Vice President for Parliamentary Affairs, Iran's subsidy reforms would save 20 percent of the country's budget.[ citation needed ] Iran wants to save up to $100 billion on subsidies within three to four years. [30] [31] In 2011, the Iranian parliament approved a $508 billion budget based on $80/barrel oil price. This bill also factors in $54 billion from price hikes and subsidy cuts. [32]

Iran's oil and gas projected revenues by the International Monetary Fund. Iranian officials estimate that Iran's annual oil and gas revenues could reach as much as $250 billion by 2015. Iranoilandgas.jpg
Iran's oil and gas projected revenues by the International Monetary Fund. Iranian officials estimate that Iran's annual oil and gas revenues could reach as much as $250 billion by 2015.
Iran's GDP projections, 1999-2015 est. IRAN GDP.jpg
Iran's GDP projections, 1999-2015 est.
IMF Projections/Scenarios [22]
as at 2008/092014/15
Baseline		2014/15
Energy price reform
Real GDP growth −3.7%3.5%~8% (1/3 from productivity improvement)
Real GDP growth (non-oil) 2.9%3.8%~8%
Crude oil exports 2.4 Mb/d [34] 1.8 Mb/d~2.5 Mb/d
Current account 7.2%0.2%~2.5%
CPI inflation 25.4%10%~7% (peaking above 30% in 2011)
Gross official reserves $80 billion$98 billion~$170 billion
Overview of 2011–12 budget and comparison with 2010–2011 budget. [35]
Item2011–122010–11 % Change
General Budget, of which17012931.8%
Development Expenditure3531.710.4%
General Expenditures & Other Items13597.338.7%
Budget for State-Owned Banks and Enterprises355252.540.6%
Total*508368.437.9%
Resources from Subsidies Phase Out5420171.7%

* Totals may not add up due to rounding and deduction of double-counted items Note: all numbers are in billion dollars.

Income data

According to the IMF, until recently a four-member Iranian household received an average of $4,000 a year in subsidies for oil and natural gas, compared with a typical annual income of about $3,600 a year. Tajrishbazar.JPG
According to the IMF, until recently a four-member Iranian household received an average of $4,000 a year in subsidies for oil and natural gas, compared with a typical annual income of about $3,600 a year.

According to the IMF, until recently[ when? ] a four-member Iranian household received an average of $4,000 a year in subsidies for oil and natural gas, compared with a typical annual income of about $3,600 a year. [36]

In 2010, Iran's Department of Statistics announced that 10 million Iranians live under the absolute poverty line and 30 million live under the relative poverty line. [37] President Mahmoud Ahmadinejad says implementation of the targeted subsidy system will eradicate unemployment and poverty in Iran within three years.[ citation needed ]

Data collection

The administration has said earlier that it will be able to allocate different payment amounts to different people. [8] To that end, in 2009, forms were distributed asking Iranians to report income, assets and property but the question remains on how the government will verify this information gathered by self-reporting. Many people have chosen not to report or withhold information.[ citation needed ] The administration has categorized the people into three income brackets; namely lower, middle, and higher for the implementation of the subsidy reform plan. [38] On the other side, it was not clear in what form the compensation would be distributed, direct cash or goods. Another concern is the accuracy of government information on family incomes.

In September 2010, Iran's Statistics Bureau announced that implementation was delayed by one month because they were still collecting information regarding the financial situation of households and opening bank accounts for them. [39]

Plan revision

Later in 2010, the government announced that it had revised its plan because of lack of reliable data on personal incomes. To ease the economic loss from lost subsidies, the government indicated it would distribute $40 per person/month (i.e. 455,000 rials/month) to 90% of the general population, starting on December 18, 2010. [40]

Original vs. Revised plan
ItemOriginal/Budgeted plan (2010)Revised plan (2011)
% population receiving cash handouts50%>90% [29] [41] [42]
Amount re-directed from subsidies$20 billion/year<$54 billion/year [32] [43]
Cash handout per capita/month$25 [44] $40 [45]
Cost in 2011 budget for this handout$10 billion>$30–35 billion
(>$2.5 billion/month) [46]
Amount allocated for production &
government from subsidies re-direct		$10 billion ($6 billion for production and
$4 billion for government to cover increased costs)		>$10 billion for production

Price adjustments

Between 2002 and 2006, the rate of inflation in Iran has been fluctuating between 12 and 16%. Inflation-Iran.png
Between 2002 and 2006, the rate of inflation in Iran has been fluctuating between 12 and 16%.

The government took control of deciding how much the prices should rise in a year, as long as the subsidy cuts on gasoline and other refined products, natural gas, electricity, water, food (sugar, rice, cooking oil and bread), health and education are between $10 and 20 billion dollars annually. Estimates indicate that the government has to increase existing prices by an average of 2.5 times to achieve the lower target and by 4 times for the maximum target. [48] According to the IMF, Iranians can expect the first price hike to lift energy product prices between four and 20 times previous levels, with prices surging even higher eventually. [49]

Other determinants

According to the plan, the type of consumption (i.e. whether agricultural, industrial and civil) will also be considered when setting energy prices. [50] The subsidy plan will be implemented in proportion with geographical regions because warm regions consume more electricity during summer while cold regions consume more gas during winter. Finally, the time of consumption (i.e. during peak and off-peak hours) and the consumption demand (i.e. whether it is low or high) will be taken into consideration. [51]

Commodity
(or service)		Old Price
(as of 12/17/2010)		New Price/Increase
(as of 12/18/2010)		Initial decrease in consumption
(as of 01/01/2011) [51] [52] 		Target price
(by 2015)
Gasoline 10 cents/liter; 40 cents/liter (beyond 60 liters/month) [1] 40 cents/liter; 70 cents/liter (beyond the quota, except for public service cars which receive a higher quota)[ citation needed ]5–20% (from 64 million to 53 million liters/day) [51] [52] [53] [54] Prices for oil derivatives not less than 90% of the prices in the Persian Gulf market (f.o.b) [50] ($0.88-0.91 per liter as of 2014) [55]
Diesel $0.06/gallon [51] $0.6/gallon ($1.4/gallon on the open market) [51] 20% (from 54 to 41 million liters/day) [51] —
Natural gas 1-1.3 cents/m3 for households and 0.5 cents/m3 for power plants [1] >500% price increase; [56] on average 7 cents/m3 for households and industry and 8 cents/m3 for power plants [1] 6% (for cooking gas) [56] 75% of the average export price for the general population; 65% of the average export price for petrochemical companies for 10 years. [48]
CNG 4 cents/m3 [1] 30 cents/m3 [1] ——
Electricity 1.6 cents/KWh [57] <300% [56] 11% [1] at production cost (8 cents/KWh as of 2010; 10 cents in 2015) [48] [57] [58]
Water 9 cents/m3 [1] 25–37 cents/m3; [59] 300-400% increase [56] (2,500 rials/m3 for household usage; 4,128 rials/m3 for industrial usage) [56] 5% [52] at production cost (~10,000 rials/m3 for household usage) [48] [60]
Bread (loaf of brick oven bread)5–20 cents; [51] Wheat: 1 cent/kg [1] 200% [5] (40 cents); Wheat: 28–30 cents/kg. [59] Price of bread increased again to 45 cents in April 2011. [61] ——
Taxi & inter-city buses —10–18% (city buses, domestic flights and the metro, are not allowed to raise prices at all) [62] ——
Air+rail transport —>30% (not yet implemented) [63] [64] ——

Starting in April 2012, Iran's consumers have been hit with a wave of rising prices that has now touched laundry detergent and food items such as cooking oil, rice, eggs and dairy products. Since April 2012, the price of food and other consumer products have risen between 10 and 20% in some cases. [65]

The latest official data comparing prices of foodstuffs in the second week of April 2012 to the corresponding period in 2011 showed dairy products rose about 42 per cent, red meat 47.5 per cent, rice about 29 per cent, beans 45.7 per cent, vegetables 92 per cent, sugar 33 per cent and vegetable oil 30 per cent. [66] The price of chicken nearly tripled since 2011. [67] [68]

Consumption patterns

As of October 2011, consumption of liquefied petroleum gas, gasoline, kerosene, and diesel has cut between 4 and 19%, despite the fact that more than 1 million cars have been added to Iran's fleet. [69] Increased use of compressed natural gas (CNG) to fuel cars has also reportedly played a role in this. According to the government, if oil products consumption had not been managed, consumption of gasoline would have increased to 120 million liters per day, while by reforming consumption pattern the figure has fallen to 60 million liters per day. [69] In November 2011, the Government reported that the subsidy reform plan has saved Iran $6 billion. [20]

Subsidizing fuel prices has been the primary factor accounting for a 500 percent rise in Iran's domestic energy consumption over the past three decades, while the size of the population has doubled over the same period. Energy consumption per capita-Iran.png
Subsidizing fuel prices has been the primary factor accounting for a 500 percent rise in Iran's domestic energy consumption over the past three decades, while the size of the population has doubled over the same period.
Iran's gasoline and gas-oil production and consumption projection (2008-2012) Iran Gasoline.png
Iran's gasoline and gas-oil production and consumption projection (2008–2012)
Savings[ citation needed ]
Item20102011Reduction in consumption (2010–11)Savings (as of January 2012)
Petrol62.8mn liters/day59.3mn liters/day3.5mn liters/day$2.1 billion (for gas oil) [69] [ clarification needed ]
Liquid gas (CNG)12.3mn liters/day11mn liters/day1.3mn liters/day$200 million [69]
Gasoline81mn liters/day73mn liters/day8mn liters/day$880 million, [69] despite the fact that 4000 new cars are registered each day and continued fuel smuggling with neighboring states.
Kerosene——2.9mn liters/day$770 million [69]
Furnace oil18.1mn liters/day11.5mn liters/day6.4mn liters/day$1.350 billion [69]
Electricity———~$400 million [71] ($10 billion when including capital investment and fuel for power plants)
Water———$8.1 billion [71]
Wheat/flour——-22.4%—
Total:———$15 billion [71]

Economic and structural adjustments

The reforms target one of the major sources of inefficiency and price distortions in the Iranian economy, and will likely lead to major restructuring in almost all economic sectors. [1] The banking sector in Iran is viewed as a potential hedge against the removal of subsidies, as the plan is not expected to have any direct impact on banks. [72] Experts believe that following the launch of the subsidies reform plan, the electricity industry will undergo significant changes and will become more appealing to private investors. [73]

On the other side, the cement industry in Iran is one of the economic sectors that will be hit the hardest in Iran following of the subsidy reform plan, because many Iranian cement factories are energy inefficient (Notwithstanding possible Ministry of Commerce adjustment and/or liberalization of commodities prices by the government during implementation). [74] Taxi, delivery and truck drivers have also been adversely affected by the recent[ when? ] gas price increase. [75] Experts believe that the removal of subsidies is likely to have an adverse impact on the profitability of the automotive sector for at least the next 2–3 years. [1] One major element of pressure on producers is the unchanged exchange regime of the Central Bank of Iran, which puts imported products at an advantage by failing to compensate for the relative increase in production costs of domestic producers. [1]

Second phase

During the second phase, starting in June 2012, half of the funds from energy and food subsidies will be re-allocated to the people and the remaining 50% will go to the industrial sector. If approved by the Parliament, the government will pay an extra cash handout of 280,000 rials/month to 80% of the general population (i.e. people earning less than $2000/month, which is a comfortable income level in Iran).[ citation needed ] In July 2012, it was announced that implementation of the second phase was suspended awaiting further adjustments by the government and because of raising inflation (around 22% as of April 2012). Finally, in fall 2013, the parliament approved a plan to drop 22 million Iranians—the top 30 percent of earners—from the subsidy system instead. [76] Yet, it was reported in 2014 that out of Iran's population of 77 million, 73.6 million registered to receive the cash hand-outs. [77]

Effects and criticism

2010

According to earlier critics, even if half of $20 billion is passed as part of the compensation to the poorer 50% of the Iranian society, it will amount to $25 per eligible person per month; "no way near enough to make up for such inflation rates".

Critics say that if the government goes for the top of this range inflation could rise up to 40% through the economy.[ citation needed ] The International Monetary Fund, however, has predicted a more moderate rise in inflation of just 32 percent. [70] As of January 2010, the official inflation rate stands at 15 percent. [31] The cost of living in Iran, according to the Majlis Research Center, could rise by up to 60 percent. [70] [78] Ahmadinejad's administration contends that the negative side effects will be transient and that the projections are based on out-of-date models. [41]

2011

According to some western reports, cash payments have been denied to some opponents of the regime during the distribution phase. [79]

Ahmad Tavakkoli, a parliamentarian, accused the government of “violating the law” and “mis-implementing” the plan because it earned 290,000bn rials ($23.6bn) from the cut in subsidies in the first 14 months of its implementation but paid people $36.7bn of compensation in return (he says). [66]

It has also been reported that while the subsidy reform plan needs further adaptation and fine-tuning, citizens must separate the questions of public policy from the issues of government legitimacy. [80] The IMF has hailed Iran's economic reform and asked Iran's expertise to be transferred to other countries.[ citation needed ] The Economist Intelligence Unit has also praised Iran's subsidies reform plan for its positive effect on the economy in 2011. [81]

2012

In 2012, Iran's head of the Expediency Council, Ayatollah Hashemi Rafsanjani, criticized the government for failing to reinvest the money it saved by restructuring government subsidies. To compensate, the government says it has allowed producers to adjust their prices more liberally and it has given free loans and energy subsidies in some cases. [82] [83] In recent years, income inequality in Iran has declined by different measures, which may be an effect of the subsidy reforms. For example, the income Gini coefficient fell from 0.4023 in 2005 to 0.3813 in 2010. [43] Between February 2011 and February 2012, the government earned 510 trillion rials (some $41.6 billion) by implementing the Subsidy Reform Plan. [43]

According to the World Bank:[ citation needed ]

A revision to the system of subsidies and cash transfers to better balance reimbursements and fiscal accounts has been looked upon favorably by outside analysts. Iran has made important efforts to reform its income support system away from subsidies and toward better targeted social safety nets, and this has brought down the pace of prices.

In October 2012, 179 of 240 members of parliament voted in favor of pausing the subsidy reform, because of high inflation (exacerbated by the sanctions against Iran). [84] Consequently, the growth in consumption of subsidized products rebounded in 2012. [85]

2014

In 2014, Iran started the second phase of its targeted subsidy plan under President Hassan Rohani. Petrol prices were raised by 75% from 4,000 to 7,000 rials ($0.16 to $0.28) per litre, [86] which is far from the target price of approx. $0.90 per litre. As a consequence, fuel smuggling and gasoline imports increased again.[ citation needed ]

2015

Iran's government reported that the second phase of the subsidy reform plan will continue as originally planned.

2016

According to the sixth five-year development plan (2016-2021), the subsidy reform plan is to be extended until 2021, even though this delay in the implementation runs contrary to the Parliament's ratification of the law on subsidies reform. [87]

In 2016, the Iranian Parliament approved subsidy cuts to 24 million Iranians. Under the changes, the government must end monthly cash payments of around $12 a person for many government employees with income above $900 per month and citizens who already receive social welfare. [88] Nevertheless, the government is said to be reluctant to comply because this would be "unfair" despite the risk of running large budget deficits. [89]

More recently the government has announced that it will scrap the subsidy reform plan because of "inflationary pressures" and replace it with a new plan named "energy management". The new plan aims to set new higher fuel prices (as in the original plan - consequently economize on energy consumption and increase production efficiency). [90]

Even though cash subsidies were intended for 10% of the general population originally, they were given to 90% of the population, mostly because of lack of political will and lack of accurate data on people's income. Those cash handouts "discouraged people to work in rural areas" the government has also argued, [90] although this claim is not supported by an Economic Research Forum study that found no evidence of labor supply reductions, but did find increases in hours worked among service sector workers, possibly due to business expansions made possible by the increased cash. [91]

2019

Contrary to the subsidy reform plan's objectives, and because of the abandoning of this reform plan by the Rouhani government, the volume of Iranian subsidies given to its citizens on fossil fuel increased 42.2% year-on-year, and equals 15.3% of Iran's GDP and 16% of total global energy subsidies. [92]

In 2018, with $69 billion of subsidies allocated for various types of energy consumption including oil ($26.6 billion), natural gas ($16.6 billion), and electricity ($26 billion), Iran holds the first place among the world's top countries in terms of the amount of subsidies allocated to energy consumption, thus furthering fuel smuggling with neighboring countries, waste, over-consumption, and air pollution. [93]

2021

About nine million liters of petroleum products was smuggled out of the country every day by "mafia". [94] [95] In order to improve the economy, economists have suggested that it is best for the new Iranian government to return to the full and immediate implementation of the subsidy reform plan, which was left unfinished by the previous government. [96]

2022-23

See also

Related Research Articles

<span class="mw-page-title-main">Politics of Iran</span>

The politics of Iran takes place in the framework of an Islamic theocracy which was formed following the overthrow of Iran's millennia-long monarchy by the 1979 Revolution.

<span class="mw-page-title-main">Economy of Iran</span>

Iran is a mixed economy with a large public sector. Some 60% of Iran's economy is centrally planned. Iran's economy is characterized by its hydrocarbon, agricultural, and service sectors, in addition to manufacturing and financial services, with over 40 industries directly involved in the Tehran Stock Exchange. The stock exchange has been one of the best performing exchanges in the world over the past decade. With 10% of the world's proven oil reserves and 15% of its gas reserves, Iran is considered an "energy superpower".

A subsidy or government incentive is a type of government expenditure for individuals and households, as well as businesses with the aim of stabilizing the economy. It ensures that individuals and households are viable by having access to essential goods and services while giving businesses the opportunity to stay afloat and/or competitive. Subsidies not only promote long term economic stability but also help governments to respond to economic shocks during a recession or in response to unforeseen shocks, such as the COVID-19 pandemic.

<span class="mw-page-title-main">2000s energy crisis</span> Sixfold rise in oil prices, peaking in 2008

From the mid-1980s to September 2003, the inflation-adjusted price of a barrel of crude oil on NYMEX was generally under US$25/barrel in 2008 dollars. During 2003, the price rose above $30, reached $60 by 11 August 2005, and peaked at $147.30 in July 2008. Commentators attributed these price increases to many factors, including Middle East tension, soaring demand from China, the falling value of the U.S. dollar, reports showing a decline in petroleum reserves, worries over peak oil, and financial speculation.

<span class="mw-page-title-main">National Iranian Oil Refining and Distribution Company</span>

National Iranian Oil Refining and Distribution Company (NIORDC) is part of the Ministry of Petroleum of Iran. NIORDC was established on 8 March 1991 and undertook to perform all operations relating to refining and distribution of oil products.

<span class="mw-page-title-main">Mahmoud Ahmadinejad</span> President of Iran from 2005 to 2013

Mahmoud Ahmadinejad is an Iranian principlist and nationalist politician who served as the sixth president of Iran from 2005 to 2013. He is currently a member of the Expediency Discernment Council. He was known for his hardline views and nuclearisation of Iran. He was also the main political leader of the Alliance of Builders of Islamic Iran, a coalition of conservative political groups in the country, and served as mayor of Tehran from 2003 to 2005, reversing many of his predecessor's reforms.

<span class="mw-page-title-main">Gasoline and diesel usage and pricing</span>

The usage and pricing of gasoline results from factors such as crude oil prices, processing and distribution costs, local demand, the strength of local currencies, local taxation or subsidy, and the availability of local sources of gasoline (supply). Since fuels are traded worldwide, the trade prices are similar. The price paid by consumers largely reflects national pricing policy. Most countries impose taxes on gasoline (petrol), which causes air pollution and climate change; whereas a few, such as Venezuela, subsidize the cost. Some country's taxes do not cover all the negative externalities, that is they do not make the polluter pay the full cost. Western countries have among the highest usage rates per person. The largest consumer is the United States.

<span class="mw-page-title-main">History of the Islamic Republic of Iran</span> History of Iran after the 1979 revolution

One of the most dramatic changes in government in Iran's history was seen with the 1979 Iranian Revolution where Shah Mohammad Reza Pahlavi was overthrown and replaced by Ayatollah Ruhollah Khomeini. The authoritarian monarchy was replaced by a long-lasting Shiite Islamic republic based on the principle of guardianship of Islamic jurists,, where Shiite jurists serve as head of state and in many powerful governmental roles. A pro-Western, pro-American foreign policy was exchanged for one of "neither east nor west", said to rest on the three "pillars" of mandatory veil (hijab) for women, and opposition to the United States and Israel. A rapidly modernizing capitalist economy was replaced by a populist and Islamic economy and culture.

<span class="mw-page-title-main">Energy policy of Australia</span>

The energy policy of Australia is subject to the regulatory and fiscal influence of all three levels of government in Australia, although only the State and Federal levels determine policy for primary industries such as coal. Federal policies for energy in Australia continue to support the coal mining and natural gas industries through subsidies for fossil fuel use and production. Australia is the 10th most coal-dependent country in the world. Coal and natural gas, along with oil-based products, are currently the primary sources of Australian energy usage and the coal industry produces over 30% of Australia's total greenhouse gas emissions. In 2018 Australia was the 8th highest emitter of greenhouse gases per capita in the world.

<span class="mw-page-title-main">Iran–Venezuela relations</span> Bilateral relations

Iran–Venezuela relations have strengthened substantially in recent years. "Iran and Venezuela are two friendly and united states which pave their ways to further progress and welfare for their nations", according to President Rouhani. The two countries are contemporary strategic allies of the Russian Federation and the People's Republic of China while opposing U.S. hegemony in their respective regions.

According to the Fourth Five-Year Economic Development Plan (2005–2010), the Privatization Organization of Iran affiliated with the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public and on the Tehran Stock Exchange. The privatization effort is primarily backed by reformist members of the Iranian government and society who hope that privatization can bring about economic and social change.

<span class="mw-page-title-main">Energy in Iran</span>

Iran possesses significant energy reserves, holding the position of the world's third-largest in proved oil reserves and the second-largest in natural gas reserves as of 2021. At the conclusion of the same year, Iran's share comprised 24% of the oil reserves in the Middle East and 12% of the worldwide total.

The 2007 gasoline rationing plan in Iran was launched by president Mahmoud Ahmadinejad's cabinet to reduce that country's fuel consumption. Although Iran is one of the world's largest producers of petroleum, rapid increases in demand and limited refining capacity have forced the country to import about 40% of its gasoline, at an annual cost of up to USD $7 billion.

Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls, trade restrictions, and limits on market access.

<span class="mw-page-title-main">Biofuels by region</span> Use of biofuel as energy source across the world

The use of biofuels varies by region. The world leaders in biofuel development and use are Brazil, United States, France, Sweden and Germany.

<span class="mw-page-title-main">Economic history of Iran</span>

Prior to 1979, Iran's economic development was rapid. Traditionally an agrarian society, by the 1970s the country had undergone significant industrialization and economic modernization. This pace of growth had slowed dramatically by 1978 as capital flight reached $30 to $40 billion 1980 US dollars just before the revolution.

The economic policy of the Najib Razak government marked a shift away from the state-oriented economic programmes of previous Malaysian governments. Najib Razak's government introduced various policies to liberalise the economy during his premiership from 2009 to 2018. This included a New Economic Model, subsidy reforms, international free trade agreements and stimulus packages. However, in the later stages of his administration, Malaysia experienced an economic downturn and a depreciation of the Malaysian Ringgit due to the 1Malaysia Development Berhad scandal (1MDB).

<span class="mw-page-title-main">Petroleum industry in Iran</span> Overview of the petroleum industry of Iran

Iran is an energy superpower and the petroleum industry in Iran plays an important part in it. In 2004, Iran produced 5.1 percent of the world's total crude oil, which generated revenues of US$25 billion to US$30 billion and was the country's primary source of foreign currency. At 2006 levels of production, oil proceeds represented about 18.7% of gross domestic product (GDP). However, the importance of the hydrocarbon sector to Iran's economy has been far greater. The oil and gas industry has been the engine of economic growth, directly affecting public development projects, the government's annual budget, and most foreign exchange sources.

<span class="mw-page-title-main">Fossil fuel subsidies</span> Financial support by governments for coal, oil, gas, and electricity generated from them

Fossil fuel subsidies are energy subsidies on fossil fuels. They may be tax breaks on consumption, such as a lower sales tax on natural gas for residential heating; or subsidies on production, such as tax breaks on exploration for oil. Or they may be free or cheap negative externalities; such as air pollution or climate change due to burning gasoline, diesel and jet fuel. Some fossil fuel subsidies are via electricity generation, such as subsidies for coal-fired power stations.

Tehran, the capital city of Iran, suffers from severe air pollution, and it is located near three major fault lines, while being the most populous region of the country. The officials have created financial incentives to encourage around 5 million citizens to leave the city. On December 16, 2019 Tehran had its highest air pollution index of 181.

References

  1. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Turquoise Partners: Investment Monthly (January 2011) Archived 2011-08-09 at the Wayback Machine Retrieved March 7, 2011
  2. ↑ "If Raisi wants to improve the Iranian economy, price controls are where to start". Atlantic Council. 2021-06-29. Retrieved 2021-12-26.
  3. ↑ "Trouble Ahead? Subsidies in Iran Could be About to End". iranwire.com. Retrieved 2022-05-13.
  4. ↑ "The Farda Briefing: First Signs Of Civil Unrest As Bread Prices Soar In Iran". RadioFreeEurope/RadioLiberty. Retrieved 2022-05-13.
  5. 1 2 "Iran doubles the price of bread with subsidy cut". Associated Press. Archived from the original on 2010-12-24. Retrieved 2010-03-07.
  6. ↑ "Resources - Economic Indicators". Atieh Bahar. 2008-10-20. Archived from the original on 2011-05-13. Retrieved 2010-01-30.
  7. ↑ "Senior Official Says Iran Paying $100 Billion In Energy Subsidies". Iran International. Retrieved 2022-05-13.
  8. 1 2 "Why Iran's Ahmadinejad is pushing to cut popular government subsidies". Christian Science Monitor. 2010-04-30. Archived from the original on 2010-05-03. Retrieved 2010-05-05.
  9. ↑ "Iran daily: Energy Subsidies Reach $84b". Archived from the original on May 6, 2008. Retrieved 2008-04-27.. Retrieved February 13, 2010.
  10. ↑ "Iran may limit cooperation with nuclear watchdog". Los Angeles Times. 2010-12-18. Archived from the original on 2010-08-25. Retrieved 2010-12-23.
  11. ↑ Bloomberg: Iran Gasoline Consumption Falls 13% After Government Price Rise Archived 2012-11-04 at the Wayback Machine Retrieved January 9, 2011
  12. ↑ United States Energy Information Administration: Environmental Issues in Iran (2000) Archived 2008-10-09 at the Wayback Machine . Retrieved August 16, 2009.
  13. ↑ "President: Opposition to subsidy plan is 'politically motivated'". Tehran Times. 2009-12-07. Archived from the original on 2011-07-16. Retrieved 2010-01-30.
  14. ↑ "Majlis special committee to study economic reform plan". Tehran Times. 2008-06-24. Archived from the original on 2011-07-16. Retrieved 2010-01-30.
  15. ↑ Dr. Amuzegar, Jahangir (2005-10-03). "Iran's Third Development Plan: an Appraisal". Archived from the original on 2011-11-29. Retrieved 2010-07-26.
  16. ↑ New York Times: Supreme Leader in Iran Supports Bid to Cut Subsidies Archived 2018-01-19 at the Wayback Machine Retrieved January 6, 2011
  17. ↑ "Energy subsidies – Topics". IEA. Retrieved 2021-12-29.
  18. ↑ Tehran Times: Iran gasoline import slump softens sanctions Archived 2011-10-22 at the Wayback Machine . Retrieved October 20, 2011.
  19. ↑ The Economist: The regime tightens its belt and its fist Archived 2011-04-30 at the Wayback Machine Retrieved January 17, 2011
  20. 1 2 Subsidy reform plan saves Iran $6b: minister Archived 2012-05-16 at the Wayback Machine . Tehran Times. Retrieved December 5, 2011.
  21. ↑ RAND Corporation: The Rise of the Pasdaran Archived 2011-02-02 at the Wayback Machine . Retrieved June 10, 2010.
  22. 1 2 3 4 IMF: Iran to Cut Oil Subsidies in Energy Reform Archived 2010-10-07 at the Wayback Machine . Retrieved October 13, 2010.
  23. ↑ Subsidy plan reduces poverty and income disparities in Iran: World Bank Archived 2011-12-30 at the Wayback Machine . Tehran Times. Retrieved October 19, 2011.
  24. ↑ "Iran - Country Brief". Go.worldbank.org. Archived from the original on 2007-05-03. Retrieved 2010-01-30.
  25. ↑ Islamic Republic of Iran: IMF Staff Report Archived 2011-12-21 at the Wayback Machine Retrieved March 9, 2011
  26. ↑ Nourlaw.com: The Bill for Subsidy Targeting Ready for President’s Implementation Archived 2012-01-19 at the Wayback Machine . Retrieved June 10, 2010.
  27. ↑ "Iranian Subsidy Cuts to Begin in September, Ahmadinejad Says". Businessweek. 2010-05-13. Retrieved 2010-05-26.[ dead link ]
  28. ↑ Reza Derakhshi (2009-02-09). "Iran parliament approves Ahmadinejad budget". Reuters. Archived from the original on 2010-03-12. Retrieved 2010-03-09.
  29. 1 2 "Iran Cuts Energy Subsidies as Sanctions Take Toll". BusinessWeek. 2010-12-19. Archived from the original on 2010-12-23. Retrieved 2010-12-23.
  30. ↑ "Iran: Ahmadinejad Submits Ambitious Budget". Payvand. 2006-11-22. Archived from the original on 2010-01-28. Retrieved 2010-01-30.
  31. 1 2 Derakhshi, Reza (2010-01-03). "Iran MPs reject call for subsidy bill withdrawal". Reuters. Archived from the original on 2012-10-17. Retrieved 2010-01-30.
  32. 1 2 More subsidy cuts in Iran budget Archived 2011-05-15 at the Wayback Machine . Aljazeera. Retrieved May 1, 2012.
  33. ↑ Mehr News Agency: Iran eyes $250 billion annual revenue in 5 years Archived 2018-07-17 at the Wayback Machine . Retrieved December 22, 2010.
  34. ↑ IEA: Oil (Iran) Archived 2010-12-03 at the Wayback Machine . Retrieved December 29, 2010.
  35. ↑ Turquoıse Partners (Aprıl-May 2011): Monthly Report [ permanent dead link ]. Retrieved July 29, 2011.
  36. ↑ "No. 3789 | Front page | Page 1". Irandaily. 2010-09-30. Archived from the original on 2010-10-20. Retrieved 2010-10-08.
  37. ↑ Radio Zamaneh: Ten Million Iranians Under "Absolute Poverty Line" Archived 2012-01-05 at the Wayback Machine Retrieved May 28, 2010
  38. ↑ Tehran Times: 40 percent of families in lower income bracket Archived 2011-06-13 at the Wayback Machine . Retrieved February 2, 2010.
  39. ↑ "Iran delays government subsidy reform again". Payvand. 2006-11-22. Archived from the original on 2011-06-29. Retrieved 2010-10-08.
  40. ↑ Wall Street Journal: Iran Tightens Security as Subsidy Cuts Loom. Retrieved November 6, 2010.
  41. 1 2 "FRONTLINE: Tehran Bureau: Iran's Subsidies Conundrum". PBS. Archived from the original on October 3, 2010. Retrieved 2010-12-23.
  42. ↑ United States Institute of Peace: The Subsidies Conundrum Archived 2010-10-28 at the Wayback Machine . Retrieved November 17, 2010.
  43. 1 2 3 Central bank: Income equality improved in Iran Archived 2013-11-15 at the Wayback Machine . Tehran Times. Retrieved May 4, 2012.
  44. ↑ Yoshie Furuhashi (2010-01-16). "Djavad Salehi-Isfahani, "Iran: A Good Time for Goodbye to Subsidies"". Mrzine.monthlyreview.org. Archived from the original on 2010-08-21. Retrieved 2010-01-30.
  45. ↑ Solomon, Jay; Farnaz Fassihi (2010-10-23). "Iran to Pare Food, Gas Subsidies". Wall Street Journal: A8.
  46. ↑ "Iran fuel prices rocket as subsidies cut". AFP. 2010-12-19. Archived from the original on 2010-12-22. Retrieved 2010-03-07.
  47. ↑ "Iran Inflation Rate". index Mondi. Archived from the original on 2010-10-11. Retrieved 2010-10-08.
  48. 1 2 3 4 "Iran Investment Monthly" (PDF). Turquoise Partners. 2009-01-11. Archived (PDF) from the original on 2011-07-17. Retrieved 2010-05-25.
  49. ↑ "Cutting Subsidies To Boost Efficiency: Report From IMF Economists". Iran-daily.com. 2010-09-30. Archived from the original on 2010-10-20. Retrieved 2010-10-08.
  50. 1 2 "Ahmadinejad orders implementation of subsidy reform plan". Payvand.com. 2006-11-22. Archived from the original on 2011-06-29. Retrieved 2010-01-30.
  51. 1 2 3 4 5 6 7 Globalpost: Iran remains stable despite dramatic price increases Archived 2010-12-23 at the Wayback Machine . Retrieved December 29, 2010.
  52. 1 2 3 Iran Daily: Subsidy Cuts Leads to Lower Fuel Consumption Archived 2010-12-30 at the Wayback Machine . Retrieved December 29, 2010.
  53. ↑ PBS- Frontline: Petroleum Product Usage Plummets Post-Subsidy Paring Archived 2016-07-01 at the Wayback Machine . Retrieved January 6, 2011.
  54. ↑ Dow Jones: Iran Gasoline Consumption Down 20% Year-On-Year After Subsidy Cut Archived 2011-01-02 at the Wayback Machine . Retrieved March 6, 2011.
  55. ↑ Gasoline turnaround predates subsidy reform Archived 2014-07-25 at the Wayback Machine . Iran Daily, July 16, 2014. Retrieved July 17, 2014.
  56. 1 2 3 4 5 "Cost repercussions of Iran's subsidy reform plan". Payvand.com. 2006-11-22. Archived from the original on 2010-12-26. Retrieved 2010-12-23.
  57. 1 2 "Blackouts Threaten Iran". Payvand.com. 2006-11-22. Archived from the original on 2011-06-29. Retrieved 2010-05-05.
  58. ↑ Iran Daily: Electricity Bourse Ready for Inauguration Archived 2011-02-03 at the Wayback Machine Retrieved January 8, 2011
  59. 1 2 Institute for War & Peace Reporting (IWPR): Muted Response to Iranian Subsidy Cuts Archived 2011-01-26 at the Wayback Machine Retrieved January 16, 2011
  60. ↑ Mehr News Agency: Hike in water, power prices earns govt $5b Archived 2010-12-30 at the Wayback Machine Retrieved January 9, 2011
  61. ↑ VOA: Iran Raises Price of Bread in Subsidy Phaseout Archived 2011-05-01 at the Wayback Machine Retrieved April 30, 2011
  62. ↑ The Washington Post: Resentment builds in Iran over price hikes, overhaul of state subsidies Archived 2016-03-04 at the Wayback Machine . Retrieved December 30, 2010.
  63. ↑ "Big jump in air and train ticket prices in Iran". Payvand.com. 2006-11-22. Archived from the original on 2010-11-29. Retrieved 2010-10-08.
  64. ↑ Mehr News Agency: Plane, train ticket prices not to increase for now Archived 2012-10-13 at the Wayback Machine Retrieved January 9, 2011
  65. ↑ Inflation hits Iran's grocery products Archived 2012-04-29 at the Wayback Machine . Radio Zamaneh. Retrieved April 18, 2012.
  66. 1 2 Subsidy dispute adds to Iran’s woes Archived 2012-04-27 at the Wayback Machine . Financial Times. Retrieved April 25, 2012.
  67. ↑ Chickens facing censorship in Iran Archived 2018-02-16 at the Wayback Machine Telegraph (UK), July 15, 2012. Retrieved August 1, 2012.
  68. ↑ "Report: Rare Iran protest over food price hikes." AP, 23 July 2012. Retrieved August 1, 2012
  69. 1 2 3 4 5 6 7 Subsidy Reform Plan saves Iran $5.3b in fuel consumption Archived 2012-01-16 at the Wayback Machine . Tehran Times. Retrieved January 13, 2012.
  70. 1 2 3 RFE/RL/Payvand.com: Sanctions And Iran's Achilles Heel Archived 2011-06-29 at the Wayback Machine . Retrieved June 11, 2010.
  71. 1 2 3 Subsidy cuts save Iran $8.4 billion in water, power consumption Archived 2013-06-12 at the Wayback Machine . Tehran Times. Retrieved January 13, 2012.
  72. ↑ Turquoise Partners: "Iran Investment Monthly" - October 2010 Archived 2010-12-14 at the Wayback Machine . Retrieved October 30, 2010.
  73. ↑ Turquoise Partners: Iran Investment Monthly (March 2011) Archived 2011-08-12 at the Wayback Machine Retrieved April 30, 2011.
  74. ↑ "Iran Investment Monthly" (PDF). Turquoise Partners. p. 6. Archived (PDF) from the original on 2016-03-14. Retrieved 2018-02-19.
  75. ↑ "Iran | Economy | Sanctions". Globalpost.com. Archived from the original on 2010-12-23. Retrieved 2011-01-06.
  76. ↑ Iran's 2014 Budget Taking Shape Archived 2014-01-31 at the Wayback Machine . Voice of America, January 29, 2014. Retrieved February 1, 2014.
  77. ↑ Iran Investment Monthly Archived 2014-07-14 at the Wayback Machine . Turquoise Partners, April 2014, Retrieved June 21, 2014.
  78. ↑ PBS-Iran Primer: The Subsidies Conundrum Archived 2016-07-01 at the Wayback Machine . Retrieved October 26, 2010.
  79. ↑ Tait, Robert. "Economists Say Iran Subsidy Plan A Weapon Of Political Control." Archived 2012-11-03 at the Wayback Machine Radio Liberty , 20 December 2010.
  80. ↑ Nader Habibi: Reaction to Iranian Government's Subsidy Reform Program Archived 2011-01-06 at the Wayback Machine . Retrieved April 6, 2011.
  81. ↑ "Economic jihad". The Economist. 2011-06-23. Archived from the original on 2011-09-07. Retrieved 2011-10-01.
  82. ↑ Iran Investment Monthly. Archived 2016-01-14 at the Wayback Machine Turquoise Partners, January 2012. Retrieved February 16, 2012.
  83. ↑ Rafsanjani criticizes Ahmadinejad's economic policies Archived 2013-06-13 at the Wayback Machine . Radio Zamaneh. Retrieved February 11, 2012.
  84. ↑ Torbati, Yeganeh. "Iran parliament may halt Ahmadinejad economic policy." Archived 2015-09-24 at the Wayback Machine Reuters, 7 October 2012.
  85. ↑ Iran's subsidy reform a successful example of income distribution: IMF. Archived 2014-07-14 at the Wayback Machine Tehran Times, July 12, 2014. Retrieved July 2014.
  86. ↑ "Iran: Cut those subsidies. The Economist, April 30, 2014. Retrieved March 13, 2015". The Economist. Archived from the original on August 7, 2017. Retrieved July 13, 2017.
  87. ↑ "Rouhani presents $262b budget bill to Majlis". Tehran Times Social Desk. Tehran Times. January 18, 2016. Archived from the original on February 20, 2018. Retrieved January 24, 2016.
  88. ↑ Iranian Parliament Approves Subsidy Cuts To 24 Million Iranians. Archived 2016-04-23 at the Wayback Machine RFE/RL. 14 April 2016. Retrieved May 26, 2016.
  89. ↑ Government says cannot cut cash subsidies to 24 million citizens Archived 2016-06-24 at the Wayback Machine . Tehran Times, 19 April 2016. Retrieved May 26, 2016.
  90. 1 2 Subsidy reform plan problematic Archived 2016-10-11 at the Wayback Machine . Iran Daily, October 8, 2016. Retrieved October 10, 2016.
  91. ↑ http://erf.org.eg/wp-content/uploads/2017/05/1090.pdf Archived 2018-01-17 at the Wayback Machine Salehi-Isfahani, Djavad, and Mohammad Mostafavi-Dehzooei (2017) ‘Cash Transfers and Labor Supply: Evidence From a Large-Scale Program in Iran’, ERF Working Paper No. 1090.
  92. ↑ "Iran: Largest Fuel Subsidizer in 2018". 16 July 2019. Archived from the original on 2019-07-22. Retrieved 2019-07-22.
  93. ↑ "Iran's huge energy subsidies: Supporting or battering the economy?". 28 July 2019. Archived from the original on 2019-08-02. Retrieved 2019-08-02.
  94. ↑ "Nine Million Liters Of Fuel Smuggled Out Of Iran Every Day". Iran International. Retrieved 2021-12-29.
  95. ↑ "Iran MP: Fuel Smuggled Out In Great Volumes Due To Subsidies - Iran Front Page". ifpnews.com. 27 December 2021. Retrieved 2021-12-29.
  96. ↑ "If Raisi wants to improve the Iranian economy, price controls are where to start". 29 June 2021.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.