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Iran's Electronic Fuel Card System Facing Exit

Iran's Electronic Fuel Card System Facing ExitIran's Electronic Fuel Card System Facing Exit

The Iranian Parliament on Wednesday eliminated a clause in the budget law for 2016-17, which can help phase out the electronic fuel card system nearly a decade after its introduction.

The amendment revokes a law—passed in April by the previous parliament—obliging the government to issue fuel cards for all light and heavy vehicles, including gasoline/diesel-powered ones as well as those running on bi-fuel engines, within four months of the enactment.

Fuel cards had been used to allocate subsidized gasoline quotas to car owners. The government slashed the quotas in May 2015 to offer the fuel at a single price to all consumers.

Electronic fuel cards and price of gasoline have been a bone of contention over the past year between the moderate government of President Hassan Rouhani and the previous parliament of mostly conservative-leaning lawmakers that dissolved in May.

As part of ongoing amendments to the budget law, Majlis earlier this month also passed a bill that would allow the government to supply gasoline at a single price, repealing a controversial law to introduce a two-tier pricing scheme for the fuel.

President Hassan Rouhani's administration has been seeking to end the use of fuel cards rolled out during the tenure of former president Mahmoud Ahmadinejad in 2007.

But it remains to be seen whether the government will take measures to abolish a system that it says has lost its original purpose.

The fuel card program was trumpeted as a means of curbing consumption, adjusting prices and cutting down fuel smuggling.

Oil Minister Bijan Namdar Zanganeh earlier said fuel cards are of no use when a single price for gasoline is in place, stressing that there has been no meaningful use in collecting data via the cards.

The new legislation will save consumers the hassle of using fuel cards at gas stations and improve financial transparency and curb corruption, according to analysts and experts.

Financialtribune.com