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Iran’s Parliament Approves Increased Subsidy Cuts, Mehr Reports

May 14 (Bloomberg) -- Iran’s parliament, which is reviewing the budget for the current Iranian year, plans to reduce government subsidies by $53.8 billion, the state-run Mehr news agency reported.

Parliament’s move will allow Mahmoud Ahmadinejad’s government to increase energy prices and introduce the second phase of a subsidies plan this year that started in Dec. 2010, Mehr said. The government reduced subsidies by $44 billion in the last Iranian year that ended March 19.

The government’s plans were put at risk earlier when parliament’s Integration Committee rejected on May 5 the size of the cuts sought by the president, Mehr said.

The parliament did not endorse the committee’s decision, agreeing instead to increase the reductions though by less than the $110 billion that had been requested by Ahmadinejad, Mehr said in the report published late yesterday.

To contact the reporter on this story: Ladane Nasseri in Dubai at lnasseri@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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