September 23, 2022
The government has cut by a third the volume of ultra-cheap gasoline Iranians can buy each month.
It said the reason for the change was to reduce the incentive for people to smuggle gasoline into neighboring countries where gasoline is four to 11 times more expensive than in Iran.
Iranian car owners will still be able to get 60 liters (16 US gallons) each month for the subsidized price of 15,000 rials per liter (19 cents per US gallon at the exchange rate of 300,000 rials to the dollar).
Until now, they had been able to buy another 250 liters (66 gallons) each month for 30,000 rials per liter (38 cents per gallon). Now that volume has been reduced to 150 liters (40 gallons) a month.
Drivers will no longer be able to buy more than 210 liters (56 gallons) a month.
As of late August, gasoline was selling in Iran’s neighbors for the following prices in dollars per gallon: Turkmenistan $1.62; Iraq $1.95; Azerbaijan $2.22; Afghanistan $3.77; Pakistan $3.93; and Turkey $4.22.
So smugglers will still be able to make quite a substantial profit—but they may find it harder to buy gasoline from drivers with supplies now limited to 56 gallons rather than 66 gallons each month. Still, the numbers don’t indicate the new policy will do more than dent the smuggling of gasoline out of the country.
State planners have warned that consumption is now more than 100 million liters a day with production around 105 million, meaning that Iran faces the prospect of having to resume importing gasoline again if smuggling is not cut back.