IEA: Iran’s $66 billion 2009 energy subsidy is world’s highest

LONDON (Dow Jones)–Iran’s fossil-fuel
subsidy was higher than any other country in 2009 at $66 billion, the
International Energy Agency said Tuesday, creating strain on the
country’s economy and inefficiencies in its energy sector.

In its World Energy Outlook report, the IEA recognized Iran’s recent
efforts to address the problems created by the subsidies, but noted many
challenges remain before changes are implemented.

“”The chronic under-pricing of domestic energy in Iran
represents a large subsidy that burdens the economy and contributes to
deep inefficiencies in the energy sector,”” the agency said.

In its fifth Five-Year Development plan, covering 2010-2015,
Iran hopes to overhaul its energy subsidy policy with the gradual
implementation of market-based energy pricing and the replacement of
subsidies with targeted assistance to lower-income groups.

Iran’s aim is to raise the price of gasoline, diesel, kerosene,
liquefied petroleum gas and other oil derivatives to at least 90% of the
Persian Gulf export free-on board price, elevate gas tariffs for
households to 75% of the Persian Gulf export price–with preferential
rates being applied to industr… >>>

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