Minister: Gov’t Not Responsible for Price Hike

A05046427.jpgTEHRAN (FNA)- Iranian Commerce Minister Masoud Mir-Kazemi requested the parliament to hold a closed session where he can explain and describe the factors causing the price hike and inflation.

Mir-Kazemi appeared on the parliament floor in an open session to answer Tehran MPs Elyas Naderan, Parviz Soruri and Alireza Zakani on the price rise in certain commodities, the government’s wheat imports, the decision to cut subsidy on detergent powders and the unstable state of the market.

The commerce minister pointed out the global price surge in commodities, the UN sanctions against Iran, increased wages, the liberalization of commodities including petrochemical products and the psychological effects of the rumored liberalization of commodities such as diesel fuel as the main reasons for the surge in the prices of a number of basic commodities.

On the lack of market supervision, Mir-Kazemi said, under the fourth economic development plan, the State Inspectorate Organization was dissolved and the number of inspectors has dropped from 8,000 in 2004 to 800 and any increase in that number is not allowed.

He continued, this year, we employed 4,000 inspectors with the help of guilds and as a result, we had a 25 per cent increase in the cases investigated this year and the violating companies were fined 300bln Tomans (approximately $320mln).

About the price rise of rice, Mir-Kazemi said the global price surge and the three-fold rise of transport costs have raised the price of rice in Iran, despite the reduced import tariff.

The minister said detergent powder subsidy was cut due to shortage of funds so the government could pay subsidies on basic commodities such as wheat, stressing that the detergent powder market is stable now.

He said that the subsidy on detergent powder was, instead, allocated to milk.

Regarding the rise in milk price, he said, milk production costs have nearly doubled since last year but the consumer price has increased slightly.

About the 60 per cent increase in import tariff on mobile phones, he said tariffs on mobile phone sets and 1,100 other consumer commodities were increased in 2006-07.

Meantime, he said that the import tariff on mobile phones was reduced to 25 per cent the next year because the manufacturers did not fulfill their commitment and were unsuccessful.

Following Mir-Kazemi’s explanations, the MPs were not convinced and referred the questions to the appropriate committee for further examination.

Talking to reporters, the minister of commerce rejected the claimed price hikes in the month of Ramadan and said, the only increase was in the price of poultry, which, he said, is dropping now.

Asked why prices rose in Ramadan, he said, “Such talks provoke the market and the only price rise we had was in poultry 15 days before Ramadan and nothing else.”

“Even the price of rice is dropping,” the minister added.

Mir-Kazemi urged the media not to provoke the market with such reports and cause price hikes.

“The high inflation rate and the surge in the prices of certain commodities is a different issue and has nothing to do with price hikes in Ramadan,” he concluded.

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