Gasoline, Diesel Price Hikes Denied

The government will not raise gasoline and diesel prices for consumers in the current fiscal year that ends in March 2017, managing director of National Iranian Oil Refining and Distribution Company said.

“We have no plans to increase fuel prices until the end of the year,” Abbas Kazemi, who is also a deputy oil minister, was quoted as saying by Young Journalists Club news agency on Friday, dismissing speculations on an imminent price hike.

“The government is not yet considering a plan to increase prices,” Kazemi said. Mansour Riahi, managing director of NIORDC also denied any near-term intention to lift gasoline and diesel prices at the pumps. The statements come after Bijan Haj-Mohammadreza, head of Iran Gas Station Owners Union, said on Thursday that gasoline prices “will undoubtedly” rise this year.

“It is likely that regular and premium gasoline prices would increase to 12,000 rials (around 33 cents) and 15,000 rials (42 cents) per liter from the current 10,000 rials (28 cents) and 12,000 rials,” Mehr News Agency quoted Haj-Mohammadreza as saying.  He added that diesel would be sold at 5,000 rial (14 cents).

The official stressed that according to the budget law for 2016-17, President Hassan Rouhani’s administration can increase prices for oil products, including gasoline and diesel, at its discretion. Consumers and market observers were at a loss to understand why the government should or would raise domestic fuel prices or further cut the subsidies now that the international price of crude oil has plummeted by more than 50%.

“In view of the high costs of transfer, storage and distribution of gasoline, the government will consider a price hike,” Haj-Mohammadreza said.

  Scrapping Fuel Cards

Government spokesman Mohammad Bagher Nobakht said on Tuesday that  Rouhani has signaled the removal of the electronic fuel cards, putting an end to the disputed system introduced nearly a decade ago by former president Mahmoud Ahmadinejad for rationing subsidized gasoline and curbing rampant smuggling to the neighboring countries.

“Scrapping the fuel cards was part of the amendments to the national budget (2016-17) and the president has given the go-ahead” to cancel the fuel cards which the government says has lost its purpose, Nobakht told Shana. He added that the parliament had told the government to make the final decision on the fate of the fuel cards that were given to all motorists, cabbies and heavy and light vehicle owners.

Respected analysts and economic experts have long been against the fuel cards, underlining the system as unwanted and a source of corruption.

The fuel card launch in 2007 was trumpeted as a means of curbing consumption, adjusting prices and eliminating smuggling rampant before the rationing system was introduced.