May 17, 2019
The government has indicated that rationing may be adopted as a response to the re-imposition of sanctions by the United States.
Without elaborating on the details, Vice President Es’haq Jahangiri said May 4, “Some goods might be rationed and distributed through vouchers or coupons.”
A few days earlier, news reports saying that gasoline rationing was to start the next day prompted long lines at service stations. Those news reports were false, but gasoline rationing does appear to be under consideration and adoption would not be illogical given that perhaps as much as a fifth of Iran’s very cheap gasoline is being smuggled to neighboring countries.
But much broader rationing is under consideration as well. The Iranian Students News Agency (ISNA) cited Jahangiri as saying that because of US sanctions, “We might be forced to ration some goods and reintroduce vouchers for distributing them.”
The Islamic Republic never resorted to rationing when hit by US and EU sanctions from 2012 through 2015. The last time rationing was used was during the 1980-88 Iran-Iraq War.
Jahangiri admitted that some economic experts and businesses are against rationing, arguing that it would lead to more government interference in the country’s markets.
“They believe that, in our current difficult situation, rationing goods is not only irrational, but more open [competition] is necessary,” Jahangiri said. “They also believe that, instead of rationing goods, the government subsidies should be eliminated and paid directly to the public along with the cash monthly payments they currently receive.”
The state subsidizes many essential goods, especially heating and motor fuels. In addition, every Iranian receives a monthly cash handout from the government, which inflation has reduced from a value of about $40 per head a decade ago to barely $3 today.
The Majlis has already inserted an article in the new budget for this year stipulating that essential goods can be distributed through electronic vouchers.
The governor of the Central Bank of Iran (CBI), Abdol-Nasser Hemmati, confirmed April 14 that electronic coupons or vouchers have been prepared, but said the government would have to authorize their use—something Jahangiri confirmed is now under consideration.
The reports that gasoline rationing would start May 2 circulated the afternoon of May 1 and prompted long lines at gasoline service stations. Oil Minister Bijan Namdar-Zanganeh swiftly denied that any gasoline rationing would be imposed—on May 2. But he pointedly did not deny that gasoline rationing might be instituted later.
The reports about the imminent rationing were carried by the Fars and Tasnim news agencies, both close to the Pasdaran.
On May 4, Fars reported that Mrs. Ziba Esmaili, the public relations manager for the state company that distributes fuel, had been arrested for circulating the rationing “rumors.” She was reportedly freed on bail the next day.
Interior Minister Abdol-Reza Rahmani-Fazli later called the rationing report “fake news.” But he said, “The plan for rationing and increasing the price of gasoline has not been finalized yet.”
The news report that was denied said drivers would be able to buy 60 liters of gasoline each month at the current price of 10,000 rials per liter (about 27 US cents per gallon) with unlimited higher volumes available for 25,000 rials a liter (68 US cents per gallon). That was the system used from 2007 to 2015 when the Iran was spending a fortune to import gasoline and the United States was trying to block such imports.
But even at 68 cents a gallon, smuggling would remain profitable to Pakistan, where gasoline sells for $2.59 a gallon, and Turkey, where it is priced at $4.22 a gallon.
