Gasoline Subsidy Removal Will Not Curb Consumption

Gasoline Subsidy Removal Will Not Curb ConsumptionGasoline Subsidy Removal Will Not Curb Consumption

Despite the Oil Ministry's projection, unification of gasoline prices did not decrease its consumption, with consumption having increased in the first three months of the current Iranian year (March-June), compared with the same period of last year when gasoline prices were still subsidized.

Latest statistics published by the Oil Ministry suggest that gasoline consumption averaged 71.6 million liters per day in March-June, indicating a growth of 2.1 ml, or 3%, compared with the same period of last year, Fars News Agency reported.

A total of 70.5 ml of gasoline were consumed from April 21 to May 20, while the figure stood at 65.8 ml in the corresponding month of the previous year. From May 21 to June 20, gasoline consumption amounted to 72 ml, up from last year's 68.6 ml. On average, a total of 71.7 ml of gasoline were consumed in the said period.

The government previously offered 60 liters of subsidized gasoline monthly to private cars and motorbikes with 1,800cc-capacity engines or below via smart fuel cards at 7,000 rials (25 cents) per liter.

As of May 26, the government no longer allocates subsidized gasoline to passenger vehicles and regular gasoline is offered at a single price of 10,000 rials (30 cents) for car owners nationwide without quota, while unleaded gasoline will cost 12,000 rials (35 cents) per liter.

"Unifying gasoline prices is part of measures to curb consumption," head of engineering affairs at the National Iranian Oil Refining and Distribution Company, Saeid Naqedi, said on May 25.

Oil Minister Bijan Namdar Zanganeh also said June 13 that by offering gasoline at a single price, "consumption would be balanced out."

Subsidizing gasoline had restrained consumption at 60-70 ml per day since 2007, as car-owners were offered only a limited quota. The price unification, however, suppressed the only motivating drive for people to keep consumption in check, the report said.

In the wake of subsidy removal, provident consumers, who were consuming within the allowance, came up against a 43% increase in prices, while consumers whose consumption was considerably higher than the subsidized quota were not affected much by the price hike.

Economic experts and environmental activists are quick to blame the poor quality of locally-produced vehicles and the inefficient public transport system, among other things, for the rising gasoline use. High consumption figures continue to threaten the lives of Iranians, especially those suffering from respiratory ailments.

The economic harm of the high gasoline use aside, the health of an increasing number of Iranians in megacities is at risk along with the deepening impact on the environment, namely air and sound pollution, as the number of new gas guzzlers increases across the country daily.

Tehran and several major cities are saddled with a seemingly unending air pollution problem. More than 17 million vehicles are currently commuting on Iran’s roads, a figure that is believed to be much higher than the roads and highways can handle, due to the doubling of the population over the past 30 years.