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In Iran, forces on alert after subsidy cuts

Associated Press / December 20, 2010

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TEHRAN — Security forces flooded Iran’s capital in a warning against possible unrest as fuel prices surged 400 percent yesterday under plans to cut government subsidies and ease pressure on an economy struggling with international sanctions.

The so-called economic surgery has been planned for months, but was repeatedly delayed over worries of a repeat of gas riots of 2007 and political infighting during the standoff with the West over the Islamic Republic’s nuclear program.

But the timing for the first painful steps — just after a first round of nuclear talks with international powers and a second planned for early next year — suggests one of the world’s leading oil producers is feeling the sting of tightened sanctions. And it might open more room for possible compromises with world powers in exchange for easing the economic squeeze.

President Mahmoud Ahmadinejad said Saturday that it was finally time to begin trimming state subsidies that lowered the costs of bread and cooking oil and gave Iran some of the cheapest fuel prices in the world.

He also noted that he saw “positive points’’ in talks earlier this month.

Riot police took up posts around the major intersections as the subsidy cuts took effect.

Under the new system, each personal car receives 16 gallons of subsidized fuel a month costing $1.50 a gallon, a fourfold increase. Further purchases of gas would run $2.70 a gallon.

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