New Strategy for Retaining Fuel Cards

New Strategy for Retaining Fuel CardsNew Strategy for Retaining Fuel Cards

The government may introduce incentives and deterrent measures to encourage Iranian drivers to keep using smart fuel cards, once the deadline to use the subsidized gasoline quota via such cards comes to an end.

A possible incentive would be to award loyal consumers extra liters of gasoline or offer a discount on the liberalized price of approximately 30 cents per liter (10,000 rials), according to a report by IRNA.

However, analysts rule out the idea, arguing that the cash-strapped Oil Ministry is struggling to fund major national oil and gas projects, and does not have extra money for such programs.

A second scenario would be to impose deterrent, or as some may say, punitive measures that call for forcing consumers to using their own cards instead of those of gas attendants. In this case, drivers would be charged an extra amount for using the attendants' cards.

The mechanism of such a plan or the extra amount that should be paid by consumers is not determined yet, but it sounds a more likely option because of its relatively easy and cost-free implementation.

In late May, the government announced it would no longer allocate subsidized gasoline, among other types of fuel, to passenger vehicles at a price of 70,000 rials and regular gasoline would be offered at a single price of 10,000 rials (around 30 cents) without a quota for car owners nationwide.

Consumers have until November 21 to burn the remainder of their subsidized gasoline.

Consumers burn 11 million liters of subsidized gasoline a day on average, according to officials who put the remainder of subsidized gasoline at around 600 million liters as of September 22.

Bijan Haj-Mohammadreza, the head of Iran Gas Station Owners Union, has slammed as "time-consuming" the use of fuel cards in gas stations, stressing that filling up cars at gas stations would be more efficient and uncluttered once the cards are deactivated.

Proponents say fuel cards have helped to gradually close the gap between the real and subsidized prices of gasoline over the past eight years and also to keep track of dilapidated gas-guzzlers nationwide.

Earlier this week, the government announced it has no plans to scrap fuel cards.

There are around 16 million active fuel cards nationwide, including 11.9 million for vehicles and 3.9 million for motorbikes, in addition to 837,000 fuel cards issued for diesel-fueled vehicles.