Date: 08 Mar 2000
Time: 13:06:59
Remote Name: 156.29.145.175
03/08/2000 Reuters English News Service (C) Reuters Limited 2000.
TEHRAN, March 8 (Reuters) - Iran 's parliament has approved fuel price increases of up to 10 percent, half of that proposed by President Mohammad Khatami's reformist government to curb crippling state subsidies, newspapers said on Wednesday.
Deputies passed a budget measure on Tuesday allowing the government to raise domestic fuel prices by up to 10 percent in the next Iranian year which begins on March 20, the daily Hamshahri said.
The outgoing conservative-dominated parliament had on Monday rejected a government proposal to raise petrol prices by 28 percent and prices of other fuels and electricity by 20 percent.
Iran has some of the world's lowest fuel prices, with a litre of regular petrol selling for 350 rials (about four U.S. cents).
The approved price rise, lower than the annual inflation rate of 22 percent, was also part of a five-year development plan passed earlier.
Officials have repeatedly urged sharper price rises as part of gradual market reforms aiming to cut heavy state subsidies, curb wasteful consumption and stop smuggling of fuel to neighbouring countries.
The government says it pays more than $10 billion a year to subsidise cheap fuel. It says higher prices would curb domestic consumption and leave more for lucrative exports.
Conservative deputies have opposed sharp price rises as a burden on the public.
The new parliament, with a strong pro-Khatami faction elected in a landslide last month, is to convene in May. ($1=8,150 rials at the official rate set on the stock market).