Iranian President Mahmoud Ahmadinejad has announced the launch of his economic reform plan aimed at overhauling the country's economy by shelving energy and food subsidies, Iranian news agency Press TV reports.
President Ahmadinejad said on Saturday that the major plan will start on Sunday and that all subsidies would gradually be removed over a five-year period. Under the new rationing system, the price of gasoline will rise four-fold from 1,000 rials (10 cents) per liter to 4,000 rials (40 cents) per liter as of Sunday. Fuel beyond a person's quota -- which is 50 liters per month -- is now sold at 7,000 rials (70 cents) per liter, up from 40 cents.
The Iranian government also said in an announcement that it will also cut subsidies of diesel, kerosene, natural gas, electricity and water as of Sunday. Officials say energy subsidies have been costing the Iranian government around 100 billion dollars a year. The government plans to gradually cut energy subsidies over a period of five years and has promised instead to compensate low-income families with direct cash handouts.
Iran launches economic reform
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