Iran says oil price moves won't deter economy plan

TEHRAN (Reuters) - Iran will suffer less from financial market turmoil than others and will press ahead with an economic reform plan despite a fall in oil prices since July, President Mahmoud Ahmadinejad said on Thursday.

"The impact will be less than on other countries because our economy has become more independent after the revolution," Ahmadinejad said, referring to Iran's 1979 Islamic revolution which ousted the U.S.-backed shah.

Other countries were suffering the consequences of their actions, he told a news conference and said the problems were the result of financial "mismanagement".

Analysts say western and U.N. sanctions on Iran over its disputed nuclear program have made western companies more wary of investing in the world's fourth-largest oil exporter.

Iranian officials have brushed off the impact of such punitive measures and say the Islamic Republic will not back down in the dispute. Western powers accuse Iran of seeking to build bombs, a charge it denies.

Ahmadinejad in June outlined plans to overhaul the country's generous subsidy system, a move that will involve introducing more direct subsidy payments to those who need them rather than blanket subsidies on goods.

Asked whether lower oil prices would affect implementation of the plan, he said: "There is a relation but it does not have a determining impact. The government is determined to execute the economic plan.

"Oil price fluctuations always exist and will not have an impact on the execution of the plan," he said. "We should certainly make this reform and we will do it."

Oil rose to $100 on Thursday, but is still sharply down from a mid-July peak above $147 per barrel.

Ahmadinejad's conservative government has come under criticism from reformist politicians, the public and the media for its failure to rein in double-digit inflation, officially running at more than 27 percent on an annual basis.

Economists say high world commodity prices have contributed but they lay most of the blame on what they say is Ahmadinejad's profligate spending of windfall oil earnings. Ahmadinejad came to power pledging to share out Iran's oil wealth more fairly.

The government has already curbed subsidies on gasoline via a rationing system.

Economists have said such moves will help cut state spending and curtail waste. But they also warn of a short-term inflationary impact, a sensitive issue ahead of next year's presidential race when Ahmadinejad is expected to run again.

(Reporting by Zahra Hosseinian, writing by Fredrik Dahl; editing by Mike Peacock)