Oct. 2 (Bloomberg) -- Iran’s government will start paying cash to individuals next week to help them cope with rising prices as it phases out subsidies for food and energy, Economy and Finance Minister Shamseddin Hosseini said.
About 60 million Iranians, or more than 80 percent of the population, have signed up for the program, which starts Oct. 7, Hosseini said in Tehran today, according to the state-run Fars news service. He didn’t say how many people will qualify for compensation or how much they will receive, according to Fars.
“The accounts of Iranian families will be credited gradually,” Hosseini was cited as saying. “They will see how much they are eligible for when they check their accounts.” Hosseini didn’t say when caps on food and energy products will be lifted or by how much.
The Persian Gulf country, hit by a fourth round of United Nations sanctions over its nuclear program, has plans to phase out subsidies over five years. The plan, which has been delayed, was due to start by the end of September.
Iran says it aims to achieve $20 billion in savings in the first year of the subsidy cuts. It plans to spend 80 percent of that money on cash grants to the poorest Iranians and targeted subsidies for energy-intensive industries.
Until recently a four-member Iranian household received an average of $4,000 a year in subsidies for oil and natural gas, compared with a typical annual income of about $3,600 a year, according to a report by the International Monetary Fund published last month by the Washington-based organization.
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