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Iran tense as subsidies end

Dec. 20, 2010 at 9:07 AM   |   Comments

TEHRAN, Dec. 20 (UPI) -- Iranians braced for unrest a day after government cuts to gasoline subsidies quadrupled fuel prices at the pump, analysts said.

Iranian news agencies reported that the price of gasoline quadrupled and electricity costs tripled. An economic plan in September aimed to relieve the economic pressure from the subsidies, which The Guardian newspaper in London reports cost the government about 25 percent of its gross domestic product.

Riot police were deployed to protect gas stations during the weekend. Iranian President Mahmoud Ahmadinejad in November, however, warned critics not to take advantage of the economic situation.

Iran switched its petrochemical plants to gasoline production to help ease strains from international economic sanctions targeting the country's energy sector. Analysts said the move is costly, however, and is unlikely to help save the government the estimated $70 billion it spends on backing the subsidies each year.

Ali Ansari, an expert on Iran at St. Andrews University, told The Guardian that Tehran is tense as the subsidies end.

"The government has been very anxious about the prospect of subsidy removal," he was quoted as saying. "They feel there could be the potential for serious civil disturbance and they are probably right."

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