The Study of Supportive Policies of Iran's Government in Energy Sector Considering the Plan of Targeted Subsidies

Issue of paying energy subsidies in various forms has been addressed in the plans of the development in Iran. According to development plan, the government was assigned to take some legal actions in order to make targeted the energy subsidies in a way that the system of subsidies is paid in the specified quantity to reach such goals as rationalizing energy consumption, preventing smuggling of these goods, reducing the proportion of social classes with high incomes and increasing the share of subsidies for classes with low-income and etc. In this respect, in the final years of the fourth plan of development, targeting subsidies was approved and it was carried out in 2011. Based on the law of targeted subsidies, the government cut all direct and indirect energy subsidy payments to energy sector and energy prices, which were previously subsidized were now priced under the new terms. On the other hand, to compensate for the purchasing power of households, a monthly cash payment of $ 40 per person was deposited to their bank account. In this paper, the analytic issues of targeted subsidies to the energy sector, efficiency of government supportive policies in this matter has been assessed.