Increasing gasoline prices would be subject to amending the 2018-19 budget law and the government so far does not intend to propose any such changes, says a lawmaker.
Jahanbakhsh Mohebinia, a member of the Majlis Planning and Budget Commission said "Higher gasoline prices will certainly add to government revenues. However, introducing an amendment to the budget law is a lengthy process and the administration has not reached a conclusion in this regard," ICANA reported.
Reports of fuel rationing have taken center stage in the media and at dinner tables over the past several weeks with both advocates and opponents of the scheme making their views known.
Most households are already grappling with galloping inflation, price rises and price gauging unseen in recent history.
Despite the fact that some officials, including Oil Minister Bijan Namdar zanganeh, support the rationing system to fight rampant fuel smuggling in the border regions, others have strongly warned against its high inflationary potential that would affect the livelihoods of the large majority of the people.
According to MP, the domino effect of high gas prices is cause for serious concern. "Higher gas prices at the pump mean less money for other goods and services."
He said a debate is underway in the Majlis Energy Commission regarding the rationing system the outcome of which will be conveyed to the government for a final decision," he said.
Critical Issue
Apparently concerned about the negative impact of higher gasoline prices on key economic parameters, the lawmaker concurred that fuel prices have always been a very critical issue and must be approached with utmost caution. “Moreover, no one really knows how high prices will go.”
There is no denying that higher fuel prices could push transportation costs across the board and by extension raise consumer prices. As is almost always the case in all countries, “higher fuel costs are passed on to consumers and we all have to pay more for goods such as food,” the legislator rued.
As opposed to most developing nations, a large part of Iranian food, fruit and fresh vegetables, plus many other daily consumer needs, is transported by road instead of railroads. This major transport shortcoming has often been talked about by exerts and respected economists pushing successive governments to develop and expand rail transport – a sector that for decades has remained deprived of policymakers’ attention and state funding to the detriment of the people.
The high and rising costs of heavy-duty vehicles, tires and spare parts in recent years have made a bad situation worse for the road transport industry.
Truckers always complain about low fares and the cost of keeping their vehicles on the road going through the roof. In the past several weeks truck drivers went on strike in many cities to protest the exorbitant rise in tire prices. They said they could no more afford tire prices and demanded the government intervene.
Nonetheless, cutting back on spending means one thing to the rich and entirely another to a family barely making ends meet.
Gasoline was rationed in 2007 to curb consumption and waste. At that time motorists could buy 60 liters of subsidized fuel each month at 7,000 rials (70 cents) per liter and gasoline without a quota was offered at a single price of 10,000 rials (30 cents) nationwide (at the time one USD was worth 10,000 rials, today it is 150,000 rials).
Iranians burn close to 100 million liters of gasoline per day, of which almost 1/3 of is imported.
