January 22, 2021
The Islamic Republic has announced that poor households will now get their electricity, water and natural gas completely free, in the latest subsidy program for the poor.
Oddly, the regime and the media have not talked a lot about this new program, which would be front page news in any other country.
The reason may be that so many people don’t pay for their utilities at all, so the new program may be more a recognition of reality than a major new program of aid for the poor.
During the revolutionary turmoil of 1978, the revolutionaries told the public to ignore their utility bills to undermine the monarchial regime.
When the new government took power, it told the public to start paying their utility bills again. But many did not bother. There were several well-publicized efforts to convince the public to pay their bills. But, eventually, that talk just petered out.
It has been a few decades since the regime announced how many people avoided paying for their utilities.
Many people with new residences do not sign up with the electrical authority; they just string a line to their homes from the nearest power pole. That, of course, is not easy to do with water and natural gas connections.
Government spokesman Ali Rabii announced the new policy December 16. He said the poorest 30 million people—or about 36 percent of the population—would be eligible for the free utilities.
He failed to say how the government would know who the poorest 30 million are when the government has been unable to tell who is poor and who is rich in order to confine the monthly welfare payments just to the poorest. The government has long acknowledged it cannot pinpoint the poor and the rich, but it neglected to explain how it would suddenly be able to do that for the free utilities program.
The new policy is also a decree from the Rohani Administration. The Majlis, which ought to approve such a plan first, had no role. The chairman of the Majlis Energy Committee, Fereydoun Abbasi-Davani, criticized the new program as purely a political gesture. He also dismissed the new policy as insignificant, saying the average electricity bill of the poor was just 30 cents a month.
No one addressed the proven fact that goods supplied for free or heavily subsidized are universally used wastefully. Iran will have to produce more electricity, water and natural gas now that more than a third of the population doesn’t have to worry if the lights and the faucet are left running all day.
The policy will also add to the government deficit. The Financial Tribune said electricity in Iran cost 2 cents per kilowatt hour to produce but has been sold for 0.7 cents or barely one-third of production costs.