Consumers and many politicians fear subsidy cuts could cause inflation to soar from the official rate of around 10 percent, something that could increase dissatisfaction with Ahmadinejad's government.
One member of parliament, Dariush Qanbari, said direct cash payments would not make up for price hikes.
"Based on what economy experts have said, the country's inflation rate will increase by 20 to 70 percent in the coming year, and the government's compensation policy should be such that the weaker segments of society can meet their basic needs," Qanbari told the semi-official ILNA news agency this month.
The total amount of fully subsidised fuel sold in Iran will be cut to 39 million litres per day from 45 million litres, Mohammad Royanian, head of Iran's Transportation and Fuel Management Office, was quoted as saying by news agencies earlier on Saturday.
Iranians consume some 61 million litres per day, according to the Oil Ministry.
Sanctions have targeted a vulnerability caused by Iran's lack of refining capacity, which means the world's fifth-largest oil exporter has until recently had to import up to 40 percent of its gasoline needs.
U.S. sanctions punish companies that sell gasoline to Iran and European Union measures ban the sale of equipment that can be used in Iran's refining sector.
Officials announced in September that an emergency plan to refine gasoline in petrochemicals plants now meant Iran no longer needed to import the fuel. Iranians fear the home-made fuel is of lower quality and has contributed to a big increase in pollution, something the government denies.
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