Newsletter May 2019
Iran belongs to the countries with the largest oil and gas reserves worldwide. The common belief is that Iranians should benefit from the abundance of energy resources through very low energy tariffs. But low energy tariffs imply subsidies and set adverse incentives for inefficient energy use. In many instances are domestic prices below the cost of production, let alone the large gap to the world market prices for exports of hydrocarbons. Although this has been recognized as a growing problem for the economy and the national budget, Iranian policy makers recoil from general tariff increases fearing social and political turmoil.
The current newsletter gives a short overview about the energy tariffs in Iran.
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