Cheap energy prices have led to for inefficient consumption, wastage, pollution, traffic, and squandering of energy in industry and production, residences as well as in commercial activities.

Government intervention in the economy not only disturbs market mechanism but also has a harmful effect on some critical variables.
In Iran, energy subsidies have imposed high financial burden on the government.
In many countries, reducing excess financial loads, increasing government income, promoting energy conservation and developing liberalization and privatization in the energy sector are the major goals for reduction and/or elimination of energy subsidies.
In economics, subsidy is defined as "a payment made by the government (or possibly by private individual) which forms a wedge between the price consumer pays and the costs incurred by producers, such that price is less than marginal costs".
Energy subsidies have been a hot topic of debate within Iran's economic circles for more than a decade. There are various arguments in favor and against the policy. However, the majority of experts would agree that subsidies have done more harm than good to the national economy.
The government in Iran subsidizes oil products heavily, to the tune of $3 billion or so per year, resulting in a large amount of waste and inefficiency in fuel consumption. The government spends over $2 billion annually to import oil products, mainly gasoline.
In April 2004, as part of an effort to curtail the rise in gasoline subsidy expenditures, gasoline consumption and imports (both of which are growing rapidly), the country's parliament voted to more than double gasoline prices, to around 95 cents per gallon. Currently, Iran's gasoline prices are amongst the cheapest in the world. In November 2003, the government announced that it might even be forced to start rationing gasoline.
In a roundtable held at the International Energy Institute, a number of top oil and energy officials and experts discussed the current status of subsidies in Iran as well as their present and future impact on the economy.
Present in the meeting were Deputy Oil Minister for International Affairs Mohammad-Hadi Nezhad-Hosseinian, Head of the Parliament Energy Commission Kamal Daneshyar, Director General of the Management and Planning Organization's Energy Department Ahmad Davoudi and several field experts.
Excerpts of their remarks were published in the bi-weekly Masha'al, affiliated to the Oil Ministry.

Lost Logic
Nezhad-Hosseinian said cheap energy prices are causes for inefficient consumption, leading to wastage, pollution, traffic, and squandering of energy in industry and production, residences and households as well as in business and commercial activities.
He said the energy consumption growth rate (national and per capita) is quite high in comparison with other countries.
"A genuine concern is that in the ensuing years, Iran will be compelled to use all of its oil production for domestic use. In such an event, the state's hard currency revenues will be substantially reduced."
Nezhad-Hosseinian said the main factor behind excessive use of fuel in Iran is that the government offers energy by-products at prices far below international standard rates in order to check inflation.
"Iranians use more energy than they should. It is inconsistent with national economic growth and compared with other countries," he said, adding that policies on energy pricing have not been entirely reasonable and certainly not based on scientific principles. Therefore they are in desperate need of review, revaluation and reform.
He said cheap prices have made the officials and the people inattentive about the consequence of efficient energy consumption, emphasizing that the current subsidy regime does not benefit lower income families, but only the wealthy.

Too Many Cars
Daneshyar said in the meeting that a poor public transport system has further aggravated the subsidy dilemma.
He said a main reason for excessive fuel consumption is the poor condition of cars and a dilapidated public transport system, which encourage people to use their private vehicles for intra-city travels.
Given that fuel subsidies account for more than three billion dollars in the national budget, each liter costs the state about three times more than it does the consumer.
"Our current policies on energy prices are tantamount to throwing away our oil resources," said Daneshyar. "For instance, since the price of energy byproducts in Iran are so illogically low, the revenues generated by one of our refineries are not even sufficient for the said refinery to rehabilitate and repair its existing tanks."
He said if the state does not lend assistance and help invest in the refinery, all refinery operations including maintenance, repair and productivity faces major difficulties.
"What kind of pricing policy is this, when it cannot even cover the basic operation and investment costs of our oil energy industry?" he asks.

Bad Decisions
There are several countries throughout the world, which do not have a fraction of Iran's national wealth, but their decision making, managerial skills and policies are more rational and logical when it comes to energy conservation and consumption.
Subsidies should be set-aside for those who need them most. The mechanism of energy subsidies in Iran must be reformed and revised thoroughly, because as it stands now, it is wholly ineffective, unproductive and inefficient. The government should gradually prepare the people to accept hikes in fuel rates and efficient energy consumption.
If a suitable and pragmatic policy in this regard is not devised, adopted and implemented soon, within the coming decade Iran will no longer be able to export oil byproducts and will be forced to use them only for domestic consumption. Perhaps, the country might even be compelled to import fuel in certain emergency instances.
Officials and experts unanimously agree that the country's strategy should be to gradually eliminate subsidies, promote efficient energy consumption, standardize energy production methods and encourage the public to use public transport by developing the system.

Gradual Process
To avoid harmful effects of removal of subsidies on economic growth, the elimination process should take place gradually.
Many types of subsidies, especially those that encourage the production and use of fossil fuel, and other non-renewable forms of energy, are damaging to the environment. They can also have high financial and economic costs, and often only bring few benefits to the people for whom they are intended.
Of course, subsidies can have certain positive consequences, particularly where they are aimed at encouraging more sustainable energy production and use. Temporary support for renewable energy and energy-efficient technologies to overcome market barriers, and measures to improve poor or rural households' access to modern, commercial forms of energy, for instance, could be positive measures in support of sustainable development.

Macadamias are a good source of protein, calcium, potassium and dietary fiber and are very low in sodium.

Although native to Australian rainforests, the macadamia nut, with its smooth buttery flavor, is finding a foothold in almost all international markets, including Iran.
Botanical experts are of the opinion that macadamia trees can also grow in the highly humid northern parts of Iran.
The macadamia kernel is one of the world's most expensive nuts. The global demand for the high-energy food is on the rise.
Some 100,000 tons of macadamia are produced worldwide per annum, with Australia accounting for 37,000 tons of global supply. The country hopes to have production increased to 38,000 tons by 2006. The second largest producer, the United States, is the largest consumer of the nut.
Macadamias taste great eaten raw from the shell, dry roasted, or cooked in oil. They can also be used to enhance the flavor of cakes, confectionery, ice cream, salads, roasts and casseroles--the possibilities are only limited by the imagination of the user.
Macadamia oils are used in cosmetics industry.
Hawaii was the site of the world's first commercial macadamia plantations. Originally thought of as only an ornamental tree, it was named after Scottish-born scientist, John Macadam after its discovery in 1857.
In 1882, a sugar plantation manager on the Big Island of Hawaii named William H. Purvis introduced the macadamia to Hawaii.
Eventually, in the 1920s the macadamia's flavor became known and the nut began to attract attention in the agriculture industry. In the 1950s, production began to increase substantially. Later, with the advent of commercial air travel, airlines seeking a snack more exotic than peanuts served small packages of macadamia nuts to their trans-Pacific passengers. This served to blend the image of Hawaii with the nut's distinctive flavor. As trade has become more global in recent years, commercial production of the nut has spread to some 30 countries and consumption in more than 100.

Nutritional Facts
Macadamias are a high-energy food and contain no cholesterol. Their natural oils contain 80% mono-unsaturated fats, the highest of any oil including olive oil.
Research shows that mono-unsaturated fats can assist in lowering blood cholesterol levels and reduce the incidence of heart disease.
Macadamias are also a good source of protein, calcium, potassium and dietary fiber and are very low in sodium. Health professionals say these are all important for good health and well-being.
Macadamias contain a higher level of mono-unsaturated fatty acids than any other commercial edible nut. The fatty acid composition is similar to that of olive oil. Palmitoleic fatty acid, which is mono-unsaturated, is present at a much higher level than in any other oil.
Research, principally being undertaken in Japan, indicates the possibility of this fatty acid significantly reducing the risk of coronary heart disease.

Ornamental Plant
Macadamia was first planted in northern Iran some 25 years ago as an ornamental tree. Later on, some agriculture students conducted extensive research study on the plant, which led to the establishment of the Macadamia Research Center.
The center began production of macadamias in 2002. Macadamia trees planted in Iran will bear fruits by the next three years. The center has allocated two hectares in a northern area in the country for the macadamia project.
Mohammad Taqi Minbashi, a senior manager of the center, is of the opinion that the results of expert studies indicate that northern parts of the country are suitable for macadamia plantation.
He told Iran Daily that macadamia is an unknown nut in Iran.
"This plant could grow well in areas where tea farms and citrus gardens are located," he said, adding that the macadamia tree is vulnerable to salty water and severe frosts.
Minbashi further said that a team of senior Australian macadamia experts visited Iran in 2002 and examined the climatic conditions in northern parts of the country to establish where the plant could grow better.
"After studying the 20-year meteorological report of northern areas, they (Australians) came to the conclusion that areas where tea and citrus are produced are suitable for macadamia plantation," he said, adding that research studies showed the quality of Iran-made macadamia nuts could match that of the Australian original.
Minbashi said the government could distribute macadamia saplings among farmers in the Caspian cities in order to encourage commercial production of the expensive nut.
Macadamia nut sells for 30-40 dollars per kilo on the international markets, making it the most expensive nut followed by cashew nuts and pistachio, respectively.
"The macadamia business is highly economical, which is why many countries have shown interest in macadamia production over the past half a century," he said, adding that the Iranian government has excluded macadamia from the list of agricultural items receiving state support.
"Investments in macadamia projects would certainly be profitable as the demand for the product well exceeds its supply," he said, stressing that 100,000 macadamia saplings have been distributed among farmers in northern parts of the country.
He, however, said state inattention has caused 80,000 saplings to be stockpiled due to the farmers' unwillingness to change their agriculture patterns and plant macadamia.
"We have not been able to import macadamia seeds this year because there are numerous saplings yet to be sold to the farmers," he added.
He said Macadamia Research Center would welcome cooperation with other countries in the field of the nut's production.

Commercial Crop
The macadamia is the only major commercial food crop that is native to Australia.
The macadamia genus consists of at least ten species, but only two of those produce edible nuts, the Integrifolia and the Tetraphylla.
The colonization of Australia by the British began in 1788 but it was not until 1875 that the recorded history of the macadamia began.
The first large planting of macadamias started in 1890 on the Frederickson Estate at Rous Mill, New South Wales. They planted around 250 trees as a source of nuts for the family. Many of those trees still exist and are still producing a good crop.
Interestingly, the largest single planting of macadamia trees is on 3,700 acres in Komatipoort, South Africa. Additionally, macadamias are grown commercially in Hawaii, Australia, Malawi, Kenya, South Africa, Israel, Costa Rica, Guatemala, Mexico, Brazil, and many other tropical and subtropical regions, including Florida.
Macadamias are also commercially important in Australia, South Africa and Central America.
Macadamias are ideally suited to a mild, frost-free climate with abundant rainfall distributed throughout the year, roughly the same climate suitable for growing coffee. Mature macadamia trees are fairly frost hardy, tolerating temperatures as low as 24¡ F, but the flower clusters are usually destroyed at 28¡ F. Young trees can be destroyed by light frosts.