Iran keeps gas price hike despite consumer 'dismay'

TEHRAN — Iran will not review cooking gas prices despite dismay among consumers who have seen their bills multiplied as much as seven fold after the government scrapped subsidies, a newspaper reported Thursday.

"The tiered system of calculating the gas price of households will not be changed," Deputy Oil Minister Javad Oji, who is in charge the state gas company, was quoted as saying by Donya-e Eqtesad daily.

Based on a tiered calculation system, the price can increase even further if consumers do not meet the "standard of consumption," a measure introduced by the government seeking to decrease energy consumption.

Under the controversial plan to end state subsidies implemented by President Mahmoud Ahmadinejad in December 2010, the price of gas per cubic metre was multiplied by more than five times to 700 rials (six US cents).

The government is now directly paying, in cash, 40 dollars (28 euros) a month to each Iranian to compensate for the hike in various energy products and bread.

Oji acknowledged that some 30 percent of consumers, particularly in Tehran, have refused to pay their winter bills, the paper reported.

Lawmakers have unsuccessfully asked the government to review the gas hikes.

The national gas company argues that there is no basis for a change in prices since more than 80 percent of consumers are paying less than 35 dollars a month.

The government has suggested that the "heavy users" could spread payment of their bill. It also advised consumers living in residential complexes to install one gas metre for each flat.

Most of the buildings share one gas metre for all households, triggering a massive bill calculated by the tiered system in a country which holds 16 percent of global gas reserves and is the world's fourth-largest producer.

The government is hoping to save billions of dollars with implementation of an economic overhaul and subsidy cuts, and a major objective is to decrease energy consumption.

According to official figures reported by the media, 74 million Iranians use as much gas as the entire household population of the European Union.

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