Police hit streets of Tehran as subsidies are cut
Groups of policemen have appeared at major intersections in the Iranian capital Tehran, in apparent anticipation of unrest as the government makes sensitive cuts to subsidies.
President Mahmoud Ahmadinejad said cuts to energy and food subsidies would start from today.
Under the new system, each car would receive 60 litres of fuel per month at a subsidised price of 30c per litre, a four-fold increase. Further petrol purchased would cost 53c a litre, compared with 30c before.
In 2007, angry protesters set dozens of petrol stations on fire after the system of fuel rationing was implemented.
Witnesses say clusters of riot police could be seen at every major square in the city. There has been no official explanation or report of disorder so far.
Eye witnesses reported a heavy police presence in the squares and junctions of Tehran such as Enghelab square and Sadeghieh and Valiasr squares as well as some western neighbourhoods of the city, though so far the city has been quiet.
In 2007, angry protesters set dozens of petrol stations on fire after the government imposed a new system of rationing to cut down on access to heavily subsidised fuel.
Iranian President Mahmoud Ahmadinejad said yesterday that the cuts in essential subsidies were the “biggest surgery” to the nation’s economy in half a century.
After the president announced the cuts long lines of cars were seen at several petrol stations in Tehran as Iranians rushed to fill their tanks at subsidised prices before the new ones took effect at midnight.
The cuts come as the Iranian economy is suffering under four rounds of UN sanctions as well as those from individual countries over its controversial nuclear program.
Still, Iran had planned to cut subsidies before the latest sanctions took effect, and Ahmadinejad and his allies have long insisted the country’s oil-based economy could no longer afford the largesse.
Tehran says it is paying some €75.6bn in subsidies annually, although experts believe the amount is about €22.4bn.
Ahmadinejad also said his government was paying €3bn in bread subsidies. That, too, is now being gradually phased out.
Economists say the unpopular plan to slash subsidies could stoke inflation already estimated to be over 20%. The cuts also are widely seen as placing added burdens on Iranians.
The government says cutting subsidies, known as the Subsidy Smart Plan, will return part of the money obtained from increased prices to the people through cash payments. It has already paid nearly €11.3bn into bank accounts of some 20 million families in the country as compensation ahead of the cuts.
