Iran MPs block Ahmadinejad's energy subsidy cuts
Thursday, 11 March 2010
TEHRAN, March 10 (AFP): Iranian lawmakers yesterday scuppered President Mahmoud Ahmadinejad's plans to cut energy subsidies by approving only half the savings wanted by his government, news agencies reported.
Lawmakers had on Monday passed a broad outline of the budget for the year to March 2011, but on Tuesday blocked a specific proposal that would have saved the government 40 billion dollars.
Despite Ahmadinejad's pleas in parliament, 111 MPs voted against the subsidy cuts, while 105 were in favour and 15 abstained, ISNA news agency said.
Instead, "lawmakers agreed to allocate 20 billion dollars of income from a subsidiary plan in next year's budget," Mehr news agency reported.
Prior to the vote, Ahmadinejad had said the expected 40- billion-dollar budget boost would not stoke inflation.
"If this sum is allocated, inflation will not rise but will fall because there will be no increase in money supply," a lawmaker quoted Ahmadinejad as telling parliament, according to state media.
The budget for the year to March 2011 marks the start of a major plan to scrap costly subsidies on energy and goods, in turn reducing government expenditure.
Under the plan, subsidies which currently cost it as much as 100 billion dollars a year would have been withdrawn gradually, with the process due to end in March 2015.
On Monday, lawmakers had approved an overall 347-billion- dollar budget for the year to March 2011 based on an oil price of 65 dollars a barrel.
The approved bill is significantly higher than the 298- billion-dollar budget for the current Iranian year ending on March 20, but less than the 368.4- billion-dollar one Ahmadinejad put to parliament in January.
Lawmakers had on Monday passed a broad outline of the budget for the year to March 2011, but on Tuesday blocked a specific proposal that would have saved the government 40 billion dollars.
Despite Ahmadinejad's pleas in parliament, 111 MPs voted against the subsidy cuts, while 105 were in favour and 15 abstained, ISNA news agency said.
Instead, "lawmakers agreed to allocate 20 billion dollars of income from a subsidiary plan in next year's budget," Mehr news agency reported.
Prior to the vote, Ahmadinejad had said the expected 40- billion-dollar budget boost would not stoke inflation.
"If this sum is allocated, inflation will not rise but will fall because there will be no increase in money supply," a lawmaker quoted Ahmadinejad as telling parliament, according to state media.
The budget for the year to March 2011 marks the start of a major plan to scrap costly subsidies on energy and goods, in turn reducing government expenditure.
Under the plan, subsidies which currently cost it as much as 100 billion dollars a year would have been withdrawn gradually, with the process due to end in March 2015.
On Monday, lawmakers had approved an overall 347-billion- dollar budget for the year to March 2011 based on an oil price of 65 dollars a barrel.
The approved bill is significantly higher than the 298- billion-dollar budget for the current Iranian year ending on March 20, but less than the 368.4- billion-dollar one Ahmadinejad put to parliament in January.