0 Iran Starts Reduce Subsidies Petrol and Bread

Iran started to reduce energy and food price subsidies. The policy was to boost the Iranian economy.

So said President Mahmoud Ahmadinejad, as monitored by the Associated Press, Saturday, December 18, 2010 local time. According to Ahmadinejad, the policy comes into force Sunday, December 19, 2010.

In an interview with Iranian state television, Ahmadinejad was determined that government subsidies in all sectors will be removed when his reign ended in 2013. Reduction of current subsidies gradually become part of that determination.

According to a new system of subsidy reduction, the price of gasoline in Iran rose from about 1,000 to 4,000 Rial Rial (around Rp3.475) per liter. The price is valid for residents who have a subsidy card. Meanwhile, for consumers who do not have a card subsidized gasoline price increases from 4000 to about 7000 Rial Rial (around Rp6.082).

Ahmadinejad said that the government also gradually reduce subsidies for the price of bread, which so far requires the budget to U.S. $ 4 billion. Consequently, the price of bread will rise.

The government revealed that the result of rising prices due to subsidy reduction program will be channeled to fund direct cash assistance (BLT) to citizens who are entitled. The government has distributed nearly U.S. $ 15 billion into bank accounts owned by 20 million families who are entitled to receive compensation before the commencement of subsidy reduction program.

Each family member is entitled to receive cash assistance worth 810,000 Rial (around Rp703.000) for the past two months. According to Ahmadinejad, citizens can get a BLT it from the bank began the day Sunday, December 19, 2010. However, he asked people not to have invaded at the same bank to withdraw cash it.

"When they all get money and spending directly used, it will disrupt the market and the people themselves are harmed," Ahmadinejad said.