Abstract
The Islamic Republic of Iran is a major producer of oil and gas, and therefore it is not surprising that the country subsidizes energy heavily. In 1995 energy subsidies were estimated at $5 billion or 6% of gross domestic product (GDP) (Salehi-Isfahani 1996), and with rising world prices in the following decades, the subsidies rose several times over to reach more than 15 percent of GDP (Jensen and Tarr 2003; Salehi-Isfahani 2014).
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Notes
- 1.
In this chapter we use the market exchange rate for energy prices because we are interested in measuring their opportunity cost in the world market. Elsewhere, when reporting on household expenditures, we use the PPP rates for private consumption taken from World Development Indicators on January 26, 2015.
- 2.
The value of the Rls 445,000 per person, per month paid out in 2011 is about Rls 756,000, which is 70 percent higher.
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Mostafavi-Dehzooei, M.H., Salehi-Isfahani, D. (2017). Consumer Subsidies in the Islamic Republic of Iran: Simulations of Further Reforms. In: Verme, P., Araar, A. (eds) The Quest for Subsidy Reforms in the Middle East and North Africa Region. Natural Resource Management and Policy, vol 42. Springer, Cham. https://doi.org/10.1007/978-3-319-52926-4_10
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