Speaking at the 4th International Conference and Exhibition on Consumption Optimization and Energy Efficiency on Monday, Arash Najafi warned that the failure to implement consumption optimization plans over the past two decades has had serious consequences for the country.

“If only 10% of consumption pattern reform had been achieved, we would be facing a positive energy balance and much better economic conditions today,” Najafi said.

Criticizing past neglect of consumption management, he stated: “Inaction in reforming consumption patterns has left us indebted to the past not only in water and energy, but also in the broader economy.”

Referring to sharp price increases in recent years, he added: “Over the past seven years, the country has experienced inflation of nearly 1,000% – a figure felt acutely in many consumer goods, including food, health, treatment and education.”

Najafi emphasized that despite difficult conditions, Iran’s industry continuously pursues modernization and reform due to its inherent nature. However, he said, “Incorrect energy pricing policies have reduced investment incentives.”

Bitter experience of the 2010 subsidy reforms

Referring to the 2010 subsidy reform experience, Najafi noted: “Distributing 40 billion tomans in cash subsidies without a mechanism to reform consumption increased liquidity, ultimately driving up the dollar exchange rate and inflation – a path that directly pressured production.”

He stated that price reforms without implementing optimization programs are ineffective. “To prevent increasing economic pressure on the public, it is essential to first launch a consumption reduction program through equipment upgrades, behavioral change and proper engineering. Price and policy reforms should then be gradually applied,” he said.

Najafi thanked responsible organizations for implementing optimization plans and stressed: “These efforts must continue in a coherent and sustained manner so we can extract the country’s economy and industry from the current crisis cycle.”