DUBAI - Iran will start cutting gasoline subsidies this week, an official said on Monday, a move that will test President Hassan Rouhani's public support as higher petrol prices add to inflation in a country already squeezed by economic sanctions.

The amount of the subsidy cut - and the corresponding rise in fuel prices - has yet to be announced, but it comes as Rouhani is under criticism from hardline rivals who oppose a cautious thaw in ties with the West that he has pursued since his election in 2013.

The subsidy cuts - a long-standing policy that pre-dates Rouhani's time in office - are aimed at freeing up government money for infrastructure investment, reducing state borrowing from banks so they can lend more to the private sector, and to encourage energy efficiency.


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