Zanganeh: Dual Gasoline Prices Trigger Corruption

Zanganeh: Dual Gasoline Prices Trigger CorruptionZanganeh: Dual Gasoline Prices Trigger Corruption

Oil Minister Bijan Namdar Zanganeh said his ministry is strongly against a legislation that mandates the sale of gasoline at two rates.

"Having two rates for gasoline leads to corruption and the Oil Ministry is against [selling] gasoline or any other petroleum product at two rates," Zanganeh was quoted as saying by ISNA on Sunday.

The government and the parliament have found themselves increasingly at odds over the pricing and method of gasoline distribution.

President Hassan Rouhani's administration has long called for scrapping electronic fuel cards—a system introduced nine years ago during the tenure of former president Mahmoud Ahmadinejad to cut costs and curtail gasoline consumption by rationing subsidized gasoline.

In May 2015, the government threw overboard subsidized gasoline at a price of 7,000 rials (around 20 cents) in favor of a single price of 30 cents per liter. The move meant the fuel card system would effectively lose its original functions of allocating quotas and monitoring consumption.

Earlier this month, a group of conservative-leaning members of parliament approved a bill that would have consumers pay up to double the amount they pay for every liter of gasoline based on a stepwise formula if they pass a consumption ceiling.

The legislation was invalidated the day it was passed into law by the MPs who introduced it in the first place. The shortlived law included a base price of 30 cents for the consumption of up to 180 liters per month and four increasing price levels.

  Renewed Effort

But as part of Iran's belated budget bill for the current Iranian year (started March 20) that was passed last week, a similar legislation was approved that would require the government to submit two rates for selling gasoline: a subsidized rate and a higher rate close or equal to the free on board prices of the Persian Gulf.

The second rate will include shipment and loading costs axed at the current price.

However, Zanganeh said the government will abide by all the parliament's legislation despite the recent acrimony.

"The government will be required to execute the law for [introducing] two gasoline prices," he said, adding that the government has no proposal on hand to revise the new law.

Just this past weekend, Mohammad Baqer Nobakht, the government spokesperson and head of Iran's Management and Planning Organization, had rejected any price change for gasoline for the present year.