Abstract
On December 19, 2010, Iran embarked on an ambitious reform of its extensive subsidies. Energy prices that had been kept well below international levels for decades were raised by a factor of 3 to 9 and bread prices were doubled. Energy price reform had been discussed for at least a decade, and the specific plan for this particular reform program was announced by president Ahmadinejad in 2008 and enacted into law in January 2010. This attempt at reform ended a huge government subsidy, estimated at upwards of $70 billion per year, or nearly $1000 per person per year. It was distributed highly unequally and caused Iran’s productive sectors to become the least efficient in the world (Guillaume et al 2011, IEA 2010, Salehi-Isfahani et al 2012).
The research for this policy brief was supported by a grant from the ERF RIAD initiative. I am grateful to the Statistical Center of Iran for the survey data. This paper first appeared as ERF Policy Perspective No. 13, 2014.
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References
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© 2016 International Economic Association
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Salehi-Isfahani, D. (2016). Energy Subsidy Reform in Iran. In: Diwan, I., Galal, A. (eds) The Middle East Economies in Times of Transition. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-137-52977-0_7
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DOI: https://doi.org/10.1007/978-1-137-52977-0_7
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