Economy, Domestic Economy

No Decision Yet to Raise Utility Prices

No Decision Yet to Raise Utility Prices
No Decision Yet to Raise Utility Prices

No decision has yet been made to increase utility prices for the upcoming year (to begin March 21, 2015), IRNA reported Tuesday citing Energy Minister Hamid Chitchian.

Based on the Subsidy Reform Plan passed by the parliament in January 2010 and the Five-Year Economic Development Plan, the government should gradually remove utility subsidies in the course of five years.

The government says it spends approximately $100 billion every year on subsidizing energy carriers. Some $45 billion of the amount is spent on fuel alone.

“So far, the energy ministry has not made any decision to increase utility prices,” Chitchian said in a meeting with the representatives of the private sector.

His remarks come as the next year’s budget bill, which was presented to the parliament on Dec. 7, underlines the government’s plan to raise utility prices.

  Privatization Role Model

The energy ministry must be considered a role model as it has already privatized over 100 contracting companies, consulting firms, and water and electricity equipment manufacturing companies, the minister noted.

Only one power plant maintenance company is currently run by the ministry and the government is planning to keep it in order to prevent monopoly in the market, Chitchian said.

He said 60% of the country’s thermal power plants are owned by the private sector, some of which have been established by the sector while others have been privatized by the energy ministry.

The minister referred to production, transfer, and distribution as three main fields in the power sector, reiterating that the government insists on maintaining control of the transfer section only while the private sector could be actively engaged in the two other sections.