The National Iranian Oil Products Distribution Company has announced that car and motorcycle owners henceforth (date to be announced very soon) must have their own fuel cards to be able to fill up at the pumps.
The NIOPDC said Monday that the measure is line with combating fuel smuggling that has taken a turn for the worse in the past several months. It, however, stressed that the plan is not related to reviving the gasoline rationing system, nor does it mean that fuel prices will increase, IRNA reported.
Those who have lost their fuel cards can refer to +10 police offices across the country apply for a duplicate. The deadline is until December 15. Car owners had fuel cards up until 2015 when the rationing system was shelved.
The prohibitive annual fuel subsidy bill the Tehran government pays is close to $35 billion -- a burden economists and experts concur is at best unsustainable and at worst gnawing away at limited funding for development in other key economic sectors
According to Telecoms Minister Mohammad Javad Azari Jahromi, 10 million new smart fuel cards will have to be issued and would cost a whopping $22 million. But he his ministry has a plan that could help in getting the job of a card done without having to incur the heavy expense of issuing millions of new cards.
"Instead of going to the +10 police office, as of November 24 people can log into the NIOPDC portal at www.niopdc.ir to either connect or convert their bank cards to electronic fuel cards," he said.
The operator of the first smart fuel card systems in Iran, Morteza Moqadasian, had said earlier that “reconditioning the old infrastructure for the fuel cards would cost $100 million.”
Selliing gasoline with fuel cards started in 2007 with the aim of curbing waste and excess consumption, adjusting prices and fighting fuel smuggling.
A Chronic Problem
Although the rationing system ended in 2015, in Sistan-Baluchestan, unlike other provinces, fuel in still rationed and people must have their own fuel cards to be able to buy gasoline and diesel at the pumps.
Data from the Anti-Smuggling Organization show that compared to last year fuel smuggling has jumped up to a staggering 50% in the border regions, namely to Pakistan and Afghanistan where it sells for much higher prices. As such the temptation to smuggle fuel to the other side of the border is very high.
It is often reported that nearly 20 million liters of fuel is smuggled everyday from Iran to the neighboring countries largely because of the huge gap in prices.
Diesel is priced at 3,000 rials (2 cents) a liter and smugglers sell it for 40 times this price in Pakistan and Afghanistan where it has buyers at 80 cents/liter.
Gasoline in the two neighboring countries is sold at almost the same price, but is priced 7 cents in Iran, which means a liter of smuggled fuel can rake in a 1000% profit.
The prohibitive annual fuel subsidy bill the Tehran government pays is close to $35 billion – a burden economists and experts concur is at best unsustainable and at worst gnawing away at much-needed funding for development in other key economic sectors.
