Rumors mounting in Iran on fuel price hike as gasoline rationing stopped

Business Materials 23 May 2015 14:46 (UTC +04:00)

Baku, Azerbaijan, May 23

By Fatih Karimov - Trend: Rumors about a hike in fuel prices grew in Iran as semi-subsidized gasoline quotas were not charged into fuel cards this month for the first time over the past eight years.

The oil minister and the managing director of the National Iranian Oil Products Distribution Company had previously rejected any change in price and volume of gasoline quotas in the current Iranian fiscal year, which began on March 21.

In this line, an informed source told Fars news agency on May 23 that the decision to stop charging fuel cards was an approval of the administration.

Iran is facing with financial resources deficit to pay cash subsidies within the framework of the subsidy reform plan. Experts say the administration should deal with the situation through either removing wealthy people of the list of subsidy receivers or increase fuel prices.

The Iranian government has increased the energy carriers' prices twice since 2010 based on implementation of the subsidy reform plan, but cheap energy still motivates people to consume more energy.

Iranians with cars currently receive a monthly allowance of 60 liters at the semi-subsidies price of 7,000 rials per liter and have to pay 10,000 rials per liter for larger volumes.

Daily gasoline consumption in Iran hit 72.5 million liters in the week ended on May 1. The country's gasoline output is currently around 62 million liters, so it needs to import the rest. The Islamic Republic currently only imports Euro-4 gasoline.