NIORDC Mulls Plan to Scrap Gasoline Cards

NIORDC Mulls Plan to Scrap Gasoline CardsNIORDC Mulls Plan to Scrap Gasoline Cards

Selling gasoline via fuel cards is likely to be stopped in the near future, but diesel will be distributed as usual, managing director of National Iranian Oil Refining and Distribution Company said on Friday.

Seyyed Nasser Sajjadi added that distribution of gasoline with fuel cards, was started eight years ago with the aim of achieving three main goals: curbing consumption, adjusting prices and cutting down on fuel smuggling, Mehr News Agency reported.

“Within the past eight years, all goals of the plan have been materialized,” he said. “Under the current circumstances where fuel prices are unified and there is no gasoline subsidy, subscribers have no tendency to use fuel cards and many people reportedly use station owners’ instead,” he said.

“Maintaining the present system of gasoline distribution will yield no new result.”

Sajjadi noted that following the unification of gasoline prices, the consumption growth rate has been curbed, as in the past 11-month period, it has only increased by less than 2% compared with the corresponding period of last year.

On the other hand, gasoline consumption in all border provinces is significantlylower than in other provinces.

“So there is no economic attraction and motivation nationwide for fuel smuggling, thus it has been halted," the NIORDC’s chief executive said. “During the eight years of the plan's implementation, gasoline price has risen by 10,000 rials (around 28 cents) from 800 rials (2 cents) per liter, which shows the realization of another goal of subsidized gasoline distribution, that is adjustment of prices.”

Nevertheless, the current system will be in place until the government issues a directive, based on which the fuel cards will no longer be in use. The official also announced that as diesel price is not on par with its actual value and it is still being smuggled, usage of diesel fuel cards will remain unchanged. Asked on returns on investment in setting up the smart fuel system, Sajjadi said the whole costs were returned in the first 15 days of the implementation of the plan, as gasoline imports decreased significantly in spite of the annual rise in the rate of automobiles.

Oil Minister Bijan Namdar Zanganeh categorically supports halting the use of gasoline fuel cards, saying that they are of no use now that prices have been unified and data obtained from fuel card is not used for any purpose.

Zanganeh believes that maintaining the present system only inflicts maintenance costs on the country, according to the Persian daily Hamshahri. Opponents, however, say scrapping fuel cards is a big mistake, as it damages distribution transparency. They propose suggestions to revive the fuel cards such as using them to impose higher taxes on fuel-intensive subscribers or to decrease gasoline quota for dilapidated cars.