Iran should raise domestic gas prices by around 10 times to help boost development of the sector and generate up to $17 billion savings in state spending, Oil Minister Massoud Mirkazemi said in remarks published Monday. The semi-official Mehr News Agency said the Oil Ministry had asked the government to allow it to hike prices to prevent a "consumption crisis," referring to growing household demand for heavily-subsidised natural gas.
"To deal with this problem I proposed to increase the price of gas by at least 900-1000 rials (about 10 US cents) per cubic metre," Mirkazemi said, adding that an "improved consumption pattern" would lead to savings of $16-17 billion.
Iran sits on the world's second-largest natural gas reserves after Russia, but sanctions blocking access to modern technology and other factors have slowed its development as an exporter. The government of hard-line President Mahmoud Ahmadinejad, whose disputed re-election last year sparked widespread opposition protests, wants to phase out costly energy and food subsidies over five years.