Gasoline illicitly sold at $1.2 per liter at Iran’s border areas
Azerbaijan, Baku, Jan. 22 / Trend F.Mehdi/
Gasoline is currently traded at 15,000 rials (about $1.2) per liter at Iran's border areas as renting fuel smart cards to other people is frequent, the Mehr News Agency reported.
Studies show that a large number of the fuel cards are being rented to smugglers at border areas.
According to Oil Ministry officials, 2-3 million liters of gasoline are smuggled per day from Iran to the neighboring countries.
After a huge decrease in smuggled fuel from Iran in 2011 because of cutting offered subsides in this field, fuel smuggling revived again during last few months due to the fall in the national currency's value.
The Iranian government cut a part of fuel subsides in late 2010, raising prices significantly which led to a decrease in fuel smuggling from 10 million liters in 2008 to three million liters per day in early 2011, according to official statistics.
However, after the drop of the rial's value versus the USD during the past few months by above 40 per cent when fuel prices remained unchanged, caused a revival in smuggling.
Deputy oil minister Alireza Zeighami said on Nov.25 that some six million liters of diesel is being smuggled from Iran each day. Gasoline smuggling has risen to two million liters per day during the past few months as well.
There are several reasons. First, because of difference between the fuel price in Iran and its neighbors, for instance the price of gasoline in Turkey is seven times more than Iran.
The second reason is the difference in amount of rial's drop in value and fuel price growth and finally the fact that Iran has thousands meters of common borders in the west, east and northern regions and controlling them is impossible for Iran.
Iranians have paid 7000 rials (about 26 U.S. cents based of USD rate in Iran's open market) for petrol; while they have a 60-litre monthly quota allowing them to purchase fuel at 4000 rials (14 USD cent) since last year.
During this period USD rate has risen about 40 per cent (from 17, 000 rials in late 2011 to 27, 000 rials now).
The Iranian parliament rejected commencing the second stage of the Targeted Subsides Plan and the government has not been allowed to increase fuel prices.
In case it is even is allowed such a rise, the inflation rate in Iran is about 25 percent and could sour after rising fuel prices.
Then there are two ways, fighting against fuel smuggling and attempting to keep the national currency value high, means the challenges seem to be a very difficult issue.