(Macleans) Katie Engelhart - With his government facing insolvency, Ahmadinejad has proposed a radical overhaul of the system of massive state subsidies that have kept life tolerable for Iran's citizens. Today, price supports are firmly entrenched and cover a broad range of goods, including gasoline, electricity, sugar, and water. BEDigest, published by a France-based energy consulting group, estimates that subsidies cost the government $100 billion a year, or about 30% of GDP. The subsidy system has also created a perfect breeding ground for "smuggling opportunities," says Peter Wells, founder of a UK-based oil consulting firm. Gasoline bought cheaply in Iran is smuggled into Pakistan by the Iranian Revolutionary Guard Corps. By some estimates, up to 17% of gas purchased in Iran is smuggled out of the country.
2010-02-16 08:33:04Full ArticleBACK Visit the Daily Alert Archive