By Dalga Khatinoglu

Head of Persian News Service ofTrendAgency

President Rouhani's administration has set the goal of519 trillion rials, (about $20.9 billion) government's income fromimplementation of the subsidy reform plan in budget bill.

The government's income from the subsidy reform planis expected to be around $11.26 billion in the current year.

The Parliament approved the generalities of changes tothe next year's budget bill on Jan.28. One of the mostcontroversial items of the budget was the subsidy reform plan.

The budget bill didn't specify detailed fuels prices,but increasing the government's incomes from the subsidy reformplan means more cuts to the state finances on subsided commoditiesand the necessity of raising fuel prices.

Former President Mahmoud Ahmadinejad's administrationin December 2010 implemented the subsidy reform plan to make someprofit.

The subsidy reform plan is aimed at easing pressure onstate finances by cutting tens of billions of dollars fromgovernment subsidies on food and fuel. The government pays cash tocitizens as compensation for increased prices by cuttingsubsides.

Iranian government currently spends $1.4 billion permonth ($16 billion annually) on the cash subsidies, which is $4.74billion more than its income from the subsidy reform plan.

Fars News Agency quoted the Member of Parliament AhmadTavakoli on Jan.28 as saying that in order to achieve the set goalof $20.9 billion, the government needs to double fuel prices, whichwill not be affordable to citizens.

Fuel prices were supposed to be increased by 20 percent each year,however, Ahmadinejad's administration increased the prices by 67percent instantly which resulted in inflation and recession.

The official inflation rate in last Iranian calendarmonth was 35 percent, a fact that Masoud Nili the economic advisorof President Hassan Rouhani mentioned on Jan.28, saying that theincrease of fuels prices is unavoidable.

The Iranian solar year starts on March 20.

Another MP Mehrdad Bazrpash also told the Mehr NewsAgency on Jan.28 that the government wants to increase the price ofgasoline to about 60 cents in the next Iranian calendar year.

He went on to note that the government will not increase prices inthe first quarter of the next year, so the increase will be carriedout in just nine months. So the energy carriers prices will rise by111 per cent in the next year.

* All of the values in Iran's national currency,rial, have been changed to official USD rate at 24, 865 rials,announced by the Central Bank of Iran on Jan.29. The current USDrate in Iran's open market is 29,550 rials.

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