Govt. delays implementation of second stage of subsidy reform plan

TEHRAN, May 27 (MNA) -- The spokesman of the economic reform plan working group of the administration of Iranian President Mahmoud Ahmadinejad has announced that the administration has no plan to implement the second stage of the subsidy reform plan at this point in time. “In view of the problems in the Majlis ratification (in regard to the subsidy reform plan) under the national budget law for (Iranian calendar year) 1391 (started March 20), the administration has made no decision and has no plan to implement the second stage of the subsidy reform plan at the present time,” Mohammad Reza Farzin said on Saturday. On May 5, the Majlis Integration Committee rejected the administration’s proposal to increase revenues from subsidy cuts, a move which could have effectively blocked the implementation of the second stage of the subsidy reform plan in the current Iranian calendar year. The administration of President Mahmoud Ahmadinejad presented the draft of the national budget bill for Iranian calendar year 1391 to the Majlis on February 1, in which it was proposed that the revenues from subsidy elimination savings would be increased from about $44 billion to $110 billion. Reportedly, the administration had decided to suddenly free up energy prices to complete the implementation of the subsidy reform plan this year. But the Majlis said that the administration’s decision had run counter to the subsidy reform plan, which calls for the subsidies on fuel, electricity, and certain goods to be cut over the course of five years. The implementation of the subsidy reform plan began in December 2010. On May 7, Vice President for Parliamentary Affairs Mohammad Reza Mirtajoddini said that the Majlis Integration Committee’s decision would delay the implementation of the second stage of the subsidy reform plan. Later, the Majlis rejected the committee’s decision and increased the government’s revenues from subsidy cuts. On May 13, the Majlis approved an increase in the government’s revenues from subsidy cuts from about $44 billion to $53.8 billion for the current Iranian calendar year. The parliament’s decision allows the government to raise energy prices and begin the implementation of the second stage of the subsidy reform plan. But it seems that the administration is not satisfied with the amount of increase in its revenues from subsidy cuts.