Iran's parliament has passed a bill that would cut energy subsidies to make the country less vulnerable to international sanctions over its disputed nuclear programme, the official IRNA news agency reported.

The bill needs to be approved by the hardline watchdog body, the Guardian Council, before being implemented. The parliament is still discussing other parts of the bill, including cutting food subsidies.

Subsidies have placed a heavy burden on Iran's federal budget.

Iran, the word's fifth-largest crude oil exporter, has said it will need an additional $6.5 billion from the federal budget to cover fuel imports during the fourth quarter this year and the first quarter next.

Cutting subsidies could eat into demand and lower the need for imports, depending on how far Iran drives up the price.

Higher prices could also make smuggling Iranian gasoline less profitable and in the longer term improve vehicle efficiency.

Iran has been hit by three rounds of the UN sanctions over its nuclear programme, which the West fears is a cover to build bombs. Iran denies it. – Reuters