Reforming energy subsidies: The Iran model

Journal article

Removing fuel subsidies is a tricky business. Many governments try and fail, often having to backtrack in the face of public protest or political opposition. Bolivia and Nigeria are only the latest examples. Price increases do not have to be huge to provoke opposition. Iran had that experience a few years ago when a government decreed 20 percent increase was rolled back after a year by a parliament dominated by a rival political current. It is all the more remarkable, therefore, that in December 2010 Iran itself managed to put in place one of the most radical fuel subsidy reforms ever attempted anywhere and make it stick. Prices of various fuels and related products (electricity, water, and so on) were raised not by a paltry percentage but several-fold, overnight, and all at the same time. And that was only the first round. A second round of increases is now around the corner, to be followed by yet more in due course until domestic prices are brought into line with international prices.

Authors: Tabatabai, H

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Oxford Institute for Energy Studies
• Journal: Oxford Energy Forum More from this journal
• Volume: 88
• Pages: 17-20
• Publication date: 2012-05-01
• Edition: Publisher's version
• ISSN: 0959-7727
• Language: English
• Keywords: OIES