Ahmadinejad protests after MPs reject fuel hike

TEHRAN-Iran's President Mahmoud Ahmadinejad has protested against parliament's decision to scrap from the latest budget a plan to hike fuel prices, the IRNA news agency said on Sunday.Ahmadinejad in a letter to parliamentary speaker Ali Larijani said the changes made by parliament last week when it approved the 298-billion dollar budget for the year to March 2010 were against the constitution.Issuing a "constitutional warning" in the letter, he said the lawmakers "did not respect different provisions of the constitution" and "the budget adopted is not what the government had proposed."He protested against parliament's decision to scrap a proposal that would have allowed the government to hike prices for heavily subsidised energy and utilities.The proposed hike was expected to generate around 20 billion dollars for the government during the current financial year.Several Iranian economists had urged parliament to scrap the proposal, saying it could stoke already high inflation and increase poverty. They said fuel prices could rise fourfold if the plan was implemented.Deputy parliament speaker Mohammad Reza Bahonar said parliament's decision was not without precedent."The amendment by the parliament is not something new. This has happened before in the past 29 years," Bahonar said."If the government thinks the budget proposals should be adopted without any change, it is unacceptable."The government wants to bring the cost of energy in Iran on a par with global prices within three years.Petrol in Iran currently sells for 36 US cents a gallon and electricity is as cheap as six cents per 10-kilowatt hour.The government planned to spend part of the anticipated 20 billion dollars on cash payments of 20 to 26 dollars to compensate people in low- and middle- income groups.The 298-billion-dollar budget-lower than the current year's 307 billion dollars-comes at a time when Iran is battling high inflation of around 26 percent and reduced revenue because of the plunge in world oil prices.Oil revenue accounts for 80 percent of Iran's foreign currency receipts, making the economy highly vulnerable to shifts in global crude prices, which have sunk to around 50 dollars a barrel from a high last year of 147 dollars.Ahmadinejad faces re-election in June.
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