AFP: Iran plans to hike domestic gas prices in order to encourage consumers to conserve and to help to free up supplies for export, officials said on Saturday.
TEHRAN (AFP) — Iran plans to hike domestic gas prices in order to encourage consumers to conserve and to help to free up supplies for export, officials said on Saturday.
"The decision is to be announced this summer or just after," said a senior government official.
He was speaking at the third annual Ravand Institute conference, which brings together political and economic leaders and experts from Iran and abroad, and whose proceedings may only be reported under the cloak of anonymity.
Natural gas sells for only two US cents per cubic metre (35 cubic feet) in Iran, compared with 30 cents in neighbouring countries, and the difference represents a subsidy of around 40 billion dollars a year, the official said.
The plan will be to raise the price to 15 cents for industrial customers, the official said, but he did not provide a figure for individual customers.
Ironically, while Iran has the world's second-largest reserves of natural gas, the country is a net importer because of a highly inefficient use of it in industry and profligate use on the part of private consumers.
An official from Iran's gas sector said the country needed to economise in order to export, and that it is consuming too much.
But an executive from an Iranian gas company said it was ironic that with such high reserves, Iran "could not heat its houses" and forecast that "gas shortages are going to be with us for a long time."
The senior government official said the "peak of consumption went above 500 million cubic metres a day last winter but our production did not reach that level."
In January, Iran announced record production of only 460 million cubic metres a day.
The country has a 20-year plan aiming to hike production to 1.45 billion cubic metres a day, with 642 million earmarked for domestic consumption, 259 million for injection in oil production wells and 550 million for export.
But these projects need massive investment, hampered by a US economic boycott.