Gasoline Quota Increase Under Review

Gasoline Quota Increase Under ReviewGasoline Quota Increase Under Review

The quota of subsidized gasoline for private car owners could double in the next Iranian calendar year (starting March 2015), head of the Majlis oil and gas committee said, Mizan news agency reported.

"To support domestic production, price of gasoline should advance towards global tariffs, consequently leading to an increase in the price of subsidized gasoline," Nader Fereydouni said. "Therefore, we are assessing a plan to double the quota of subsidized gasoline for the next year."

Under a smart fuel-card system, the government offers a 60 liter quota of subsidized gasoline per month at around 21 cents per liter for private cars with engines of below 2,000 cubic centimeters.

Tripling the price of unsubsidized gasoline is also on the cards. Unsubsidized gasoline is offered for a price of 29 percent per liter, but could rise to nearly 85 cents.

Additionally, there were speculations on increasing the price of subsidized gasoline from around 21 cents per liter to 29 cents. However, early this week, the government's spokesperson Mohammad Bagher Nobakht ruled out the decision and said in a statement that "this is unlikely to happen by March 2016."

Iran significantly reduced energy subsidies in December 2010 as part of a five-year program to gradually increase prices of oil products, natural gas and electricity to the full cost price.

Fereydouni also stressed that inflation has had a negative impact on the society, and further increase in the prices of energy carriers "would only aggravate the situation."

"Any increase in the price of energy carriers should be in line with infrastructure development. The society cannot bear the pressure of higher prices."

He urged the government to manage taxi fares and prices of other public transport services in line with increase in price of energy carriers.