Subsidized Gasoline Inventory Depleting

Subsidized Gasoline Inventory DepletingSubsidized Gasoline Inventory Depleting

Gasoline inventory in fuel cards, at a subsidized price of 7,000 rials (20 cents), has decreased by 1.1 billion liters since the unification of gasoline prices in May 26, managing director of the National Iranian Oil Refining and Distribution Company.

"Around 400 liters of subsidized gasoline were consumed per month on average, given the limited timeframe for consumption of remaining gasoline," Nasser Sajjadi was quoted as saying by Mehr News Agency.

On May 26, the government stopped selling subsidized gasoline to private vehicles at 7,000 rials and since then regular gasoline is offered at a single price of 10,000 rials (30 cents) for car owners nationwide without a quota, while unleaded gasoline costs 12,000 rials (35 cents) a liter.

The government in 2007 started issuing electronic fuel cards across the country whereby 60 liters of subsidized gasoline were offered monthly to private cars and motorbikes with 1,800 cc engines.

The remainder of subsidized gasoline in the fuel cards, estimated at 2.5 billion liters when the price unification scheme was introduced, should be used by September 22.

"Compressed natural gas prices, currently at 5,000 rials (14 cents), will remain unchanged until the end of summer," the official added.

"The 100 rials (3 cents) decrease in CNG prices has encouraged consumers and consumption of the clean fuel has increased in the past month."

The government decided in late June to reduce CNG prices from 6,000 rials (17 cents) to 5,000 rials (14 cents) per kilogram, as part of a drive to reduce the 60% price discrepancy between gasoline and CNG.

"People's reception of the price reduction might pave the way for continued supply of the fuel at the current price," Sajjadi said.

Despite the rise in gasoline prices and the removal of subsidized gasoline quota, the price of gasoline in Iran—approximately 30 cents per liter of regular gasoline—is almost three times lower than the global average of $1.10 per liter, according to a published report in the Global Petrol Prices.