Tehran , Iran ( CNN ) -- Gas and oil prices rose in Iran Monday after the country dramatically cut subsidies for its citizens to bolster the nation 's sagging economy . The initiative went into effect Sunday , with the country saying it will gradually remove all subsidies within five years . The price of subsidized gasoline rose four-folds -- from 1,000 rials ( 9 cents ) per liter to 4,000 rials , the Mehr news agency said . Officials say energy subsidies have cost the Iranian government around $ 100 billion dollars a year , state run Press TV said Monday . While some have said the plan will stoke inflation , others say it is in line with recommendations from international financial organizations to solve Iran 's economic woes , Press TV said . Five years ago , Ahmadinejad 's government announced its plan to cut government subsidies and help adjust prices in Iran 's economy . That includes a policy to phase out subsidies on staples such as fuel and food , likely causing consumers ' costs of such items to rise . Iran has $ 10 trillion in oil resources alone , plus natural gas reserves worth between $ 3.5 and $ 4.5 trillion , International Monetary Fund mission chief Dominique Guillaume said in an interview posted earlier this fall on that world body 's website . But its economy nonetheless has seen lackluster growth , including between 1 % and 2 % of GDP this past year . Despite its abundance of fuel , Iran has been pushing to expand its nuclear program . Many in the international community , including U.S. officials , have expressed grave concerns and successfully pushed for sanctions fearing that Tehran might be trying to develop nuclear weapons . But Iranian leaders have said the nation wants nuclear power , in part to free up more oil to export and pump more money into the economy . With subsidies that effectively allowed domestic consumers to pay relatively little for oil and gas -- far below what they or people anywhere else would pay on the world market -- Iran was forfeiting potentially huge revenues , explained IMF Senior Economist Roman Zytek on his group 's website . The IRNA news agency reported Saturday that Iranians ' use of commodities like fuel `` has not followed a reasonable pattern '' -- with Zytek saying that many Iranian citizens have been buying excess amounts of oil and gas . Iran 's subsidy reforms , he said , aim to decrease domestic demand for fuel , make the country more fuel-efficient , and allow Iran to profit more from its natural resources .
The country plans to remove all subsidies in five years . The price of gasoline goes up four-folds . Iran has trillions of dollars in natural resources but still struggles , experts say . Comment: