MP Gholam-Reza Mesbahi-Moghaddam says now that Iran is entering the second stage of the subsidy reform plan, the most appropriate price for a liter of petrol is 10,000 rials (about 82 U.S. cents).

Currently gasoline is sold at two prices: a 50-liter monthly allowance at 4000 rials (33 cents) per liter, and any amount above that at 7000 rials (57 cents) per liter.

Mesbahi-Moghaddam, who is the chairman of the Majlis Economic Reform Committee, told the Mehr News Agency that since the subsidy reform plan must be implemented over a five-year period, 10,000 rials per liter is the best price for gasoline, which is now sold at 7000 rials per liter. He also suggested that the monthly allowance price of 4000 rials per liter be increased to 7000 rials per liter.

The first stage of the subsidy reform plan, which is mainly focused on cutting fuel subsidies, started in December 2010. And now the government is about to start the second stage.

Mesbahi-Moghaddam warned that the people would have a hard time if fuel prices rise too suddenly.

The total amount of subsidies paid to families during the previous Iranian calendar year, which ended on March 19, was 400 trillion rials ($ 32.6 billion), which for the current year has increased to 540 trillion rials ($ 44 billion), the MP added.

On Monday, the office of President Mahmoud Ahmadinejad denied that the government plans to treble the price of gasoline.

“Comments published saying the government has decided to sell gasoline at 2000 tomans (20,000 rials or about $ 1.64) per liter are entirely false,” the Presidential Office said in a statement issued on Monday.

Majlis Speaker Ali Larijani said on Friday that the government was seeking to triple petrol prices and to double the cost of natural gas as part of the next stage of the plan to reduce spending on energy subsidies.

Last year the International Monetary Fund commended the Iranian government for the subsidy reform policy, which it said had led to a reduction in fuel consumption.