Iranian oil subsidies place heavy burden on state coffers
During the current Iranian year (started March 20) the government will pay more than IR 60 trillion in subsidies on oil products.
The director of the National Iranian Oil Refining and Distribution Company’s Integrated Planning Department indicated that such huge subsidies place a tremendous burden on the government, which could invest such funds more prudently in the country’s infrastructure sectors.
Iran’s annual petroleum consumption is valued at $2.7 billion, reports Iran Daily newspaper. Domestic refineries produce most of this petrol, while the remainder is imported at exorbitant costs. The country’s high petroleum consumption is largely due to automobiles’ petroleum use, which is far above the international average.
If Iran is to reduce levels of domestic petroleum consumption, modern automobile technologies such as fuel injection engines, improvements in roads, and the substitution of natural gas for petroleum must be adopted. During the first four months of this year, domestic gas consumption rose by 10 percent, preventing export targets from being attained. –(Albawaba-MEBG)