News

Iran's parliament on Monday moved ahead with a bill to sharply slash energy and food subsidies, approving one article of a draft law that has the potential of stoking major unrest in a country struggling under international sanctions.

State radio said the article approved by lawmakers would gradually cut energy subsidies over five years, bringing the heavily discounted fuel prices more in line with international prices.

Officials say the cuts are needed to recoup some of the roughly $90 billion spent yearly by OPEC's second largest exporter on subsidies, and to target the funds more directly at helping poorer segments of the population as well as funding infrastructure projects.

Subsidies currently eat up about 30 percent of the government budget at a time when already high spending and the collapse of oil prices last year squeezed the country's economy.