‘Next stage of subsidy cut can’t be implemented without Majlis consent'

QOM, April 7 (MNA) – Iranian Majlis Speaker Ali Larijani said on Thursday that the second phase of the subsidy cut cannot be implemented without the consent of the Majlis. “Without Majlis’ approval, the second stage of subsidy targeting cannot be implemented, and all issues should be taken into consideration in this regard,” Larijani told reporters in Qom. To prevent a further rise in prices, Majlis has approved a law obliging the government to delay the implementation of the next stage of the subsidy reform plan until summer. To compensate for inflation resulting from increasing fuel prices, the government has been paying 450,000 rials (around 37 dollars per month) for each applicant since the first stage of the subsidy cut went into effect in December 2010. Despite warnings by MPs, the government is apparently determined to implement the second stage. To implement the second stage, the government has deposited an additional 280,000 rials into applicants’ accounts. Some lawmakers have raised questions about the sources of cash subsidies and claim that part of the money is paid from sources other than the revenues generated from the rise in fuel prices. Revenues and costs According to the subsidy reform plan, 30 percent of the revenues generated from the increase in fuel prices should be allocated to the production sector to compensate for the rise in costs. However, the Majlis says that due attention has not been paid to the production sector during the implementation of the subsidy reform plan. Larijani said that in each stage the revenues and costs should be clearly defined. The senior parliamentarian added that in the second stage “the budget of production centers, including agricultural and industrial sectors, must be clear.”