The Iranian government uses all oil revenues to import essential goods and medicine. Consequently, this strategy protects household welfare amid declining oil prices and rising economic uncertainty. Officials argue it helps citizens manage costs and meet basic needs. Vice President and Head of the Plan and Budget Organization, Seyed Hamid Pourmohammadi, outlined the government’s strategy during a parliamentary session. He explained that Iran faced two major challenges this year: a 12-day conflict and a sharp drop in global oil prices. As a result, foreign exchange revenue fell, increasing pressure on the national budget.
“Last year, oil sold for around $71 per barrel. However, this year it dropped to $51, reducing our income significantly,” he said. Pourmohammadi added that despite these pressures, the government maintained timely payments to public employees, pensioners, and development projects. Furthermore, officials increased spending on infrastructure compared with last year.
He also highlighted that the government resolved longstanding issues affecting retirees and farmers. Pension equalization problems are now fully addressed, and monthly payments of 180 trillion tomans reach retirees on time. Additionally, retired teachers received all pending payments. Moreover, the government disbursed funds to wheat farmers earlier than in previous years.
Pourmohammadi explained that oil revenues fully fund imports of essential goods and medicine at 28,500 tomans per dollar. Furthermore, the government borrows $2.5 billion annually to reinforce this allocation. He noted that the policy strains the state budget but protects people’s livelihoods. He criticized inefficiencies in the distribution system. For instance, subsidized goods often sell at inflated prices. He also pointed out inefficiencies in food production. Specifically, Iran requires 1.9 kilograms of feed to produce 1 kilogram of meat, whereas global standards require only 1.4 kilograms.
Pourmohammadi stressed the need for major welfare reforms, arguing that current mechanisms fail to reach all citizens. Poverty remains multidimensional, affecting food security, health, education, and housing. The government allocates 940 trillion tomans annually to welfare programs, including 600 trillion tomans in direct subsidies. Nevertheless, gaps persist.
He emphasized the government’s electronic voucher (Kalabarg) program, designed to cover all income levels. The new version will reach all citizens, set fixed prices for essential goods, and improve supply chain coordination between producers and distributors. Authorities will launch a pilot program in November and expand it nationwide after assessing results. Pourmohammadi added that the government assumes exchange rate and inflation risks, ensuring prices remain stable for consumers.
Furthermore, authorities will monitor producers and retailers closely to prevent misuse or shortages. Finally, he concluded by reaffirming the government’s full commitment. Oil revenues will continue supporting essential goods and medicines. Moreover, officials aim to modernize welfare systems, reduce inefficiency, and ensure fair access for all Iranians. Overall, the program seeks to strengthen social stability and improve living standards nationwide.