BREAKING NEWS

Fuel consumption falls in Iran after subsidy cut

By ASSOCIATED PRESS

DECEMBER 29, 2010 09:23

TEHERAN, Iran — A top Iranian official says fuel consumption has fallen by a fifth since the government began slashing energy and food subsidies earlier this month.

Vice President Mohammad Royanian told state TV Wednesday that quadrupling the prices for subsidized gasoline has already dropped consumption by 20 percent.

The government started slashing subsidies on Dec. 19 in efforts to boost the country's ailing economy.

President Mahmoud Ahmadinejad has called the subsidy cut plan the "biggest surgery" on Iran's economy in half a century and vowed to fully cut all subsidies by the end of his term in 2013.

The government says it is paying some $100 billion in subsidies annually, although experts believe the amount is about $30 billion.

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