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Iranian Parliament Reportedly Bans Use of Public Funds to Foot Fuel Bill

Posted on: Thursday, 20 October 2005, 09:00 CDT

Text of report in English by Iranian newspaper Iran Daily website on 20 October

The Parliament's Plan, Budget and Audit Commission has reportedly banned the use of public funds for gasoline imports as of 2006, said Fars news agency. The commission has also prohibited withdrawal of money from the Foreign Exchange Reserve Fund for petrol imports and has committed the government to adopt the necessary measures to increase domestic production of fuel. The commission allocated funds for developing public transportation. Funds saved by banning gasoline imports will be spent on social welfare projects, public education, health sector and rural development.

According to the parliamentary ratification, some 10 trillion rials worth of oil revenues will be invested in rural development projects next year. A lawmaker said here on Wednesday [19 October] that the Parliament is determined to commit the government to sell gasoline at two different prices, stressing that two-tier prices is the best solution to the problem of excessive fuel consumption.

Hadi Haqshenas, a member of the Majlis Plan, Budget and Audit Commission, said that the government has submitted a bill to the Parliament seeking to withdraw close to three billion dollars from the Foreign Exchange Reserve Fund for gasoline imports, stressing that had officials made macroeconomic decisions without taking political issues into consideration, the country would not have faced such dilemmas today.

The dual-price mechanism stipulates that gasoline be sold at international rates once consumption exceeds a certain level. Gasoline imports account for some 40 percent of domestic supply. It is also expected that over three million litres of diesel will be imported per day this winter to make up for a possible shortage of fuel at power plants. Oil Ministry is planning to cut 56 percent of the country's reliance on gasoline imports by constructing a refinery in the southern port of Bandar Abbas. The government will have to import 20 billion dollars worth of gasoline over the next four years to cater for ever-increasing demand. It has imported 10 billion dollars worth of gasoline in the past eight years. Experts say the fund could have been spent on development projects.

Source: BBC Monitoring Middle East

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