Iran parliament frees government hand over subsidies

TEHRAN (Reuters) – Iran’s parliament voted on Sunday to give the government a free hand to spend money saved from cutting food and fuel subsidies, in an apparent victory for President Mahmoud Ahmadinejad.

Removing subsidies would ease a heavy budget burden and make Iran less vulnerable to any new U.N. sanctions on imports over Tehran’s disputed nuclear energy programme, which Washington says is a front for building weapons. Tehran denies this.

But higher consumer prices could also hurt the poor and stoke unrest. The introduction of a gasoline rationing plan in mid-2007 sparked riots in Tehran.

Sunday’s vote, broadcast live on state radio, means the government of the major oil producer can spend the money in any area it sees fit, though the cash remains linked to the state budget where parliament has oversight powers.


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