- - Sunday, December 19, 2010


Heavy security after subsidy cuts

TEHRAN | Iran deployed squads of riot police around the major intersections of the capital Sunday, bracing for any kind of violent backlash in the tightly controlled Islamic Republic on the day deep cuts in food and energy subsidies went into effect.

President Mahmoud Ahmadinejad announced on Saturday night that the subsidy cuts, long expected, would go into effect at midnight. Though Iran has tremendous oil wealth, its economy appears to be straining under the weight of four rounds of U.N. sanctions over its disputed nuclear program.

Tehran says it is paying some $100 billion in subsidies annually, although experts believe the amount is far lower, closer to $30 billion. Iran had planned to slash subsidies before the latest round of sanctions took effect. Mr. Ahmadinejad and his allies have long insisted the country’s oil-based economy could no longer afford the largesse.

Economists say the unpopular plan to slash subsidies could stoke inflation already estimated to be more than 20 percent.

Before the subsidy cuts, Iran had some of the cheapest gasoline in the world.

Under the new rationing system, each personal car receives 16 gallons of subsidized fuel a month costing $1.50 a gallon - up from the just 38 cents a gallon. Further purchases of gas would run $2.69 a gallon, up from just $1.50.


State-owned pipeline explodes; 13 dead

MEXICO CITY | Authorities said a pipeline operated by Mexico’s state-owned oil company exploded in the central state of Puebla, killing at least 13 people.

State spokesman Noe Torres said the explosion happened at a Petroleos Mexicanos duct, where thieves were attempting to steal either gas or oil. He said it isn’t yet known whether the explosion was caused by the attempted theft. No one has been detained.

Mr. Torres said the initial explosion early Sunday in the city of San Martin Texmelucan was followed by four minor blasts. Hundreds of people fled the city, located 55 miles east of Mexico City.

Civil protection authorities, firefighters and military troops were investigating and trying to ensure there are no more explosions.


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