In a move aimed at quelling speculation over fuel price hikes, Iran’s government announced that the official prices of subsidized gasoline will remain unchanged — despite mounting economic pressure and rampant fuel smuggling that drains an estimated $8–12 billion from the state each year.
Government spokesperson Fatemeh Mohajerani confirmed that the two main gasoline quotas 1.5 cents for subsidized fuel and 3 cents for semi-subsidized — will stay intact. Any potential price adjustments, she said, will apply only to fuel allocations in free trade zones, luxury vehicles, and government fleets. Iran’s fuel subsidies, among the most generous in the world, have created a massive incentive for cross-border smuggling. According to official figures, an estimated 25 million liters of gasoline are illegally exported from Iran to neighboring countries every day — a volume too large, experts argue, to be the work of small-scale traffickers.
Reza Navaz, spokesperson for the fuel station owners’ association, stated bluntly: “It’s impossible that 25 million liters are smuggled through local stations. Authorities need to identify the main smuggling routes instead of limiting fuel access in Tehran.”
The vast price gap explains the scale of the problem. In Iran, a liter of gasoline costs around 3 cents, while in neighboring countries such as Turkey, the price exceeds 100 cents per liter. Smugglers can earn huge profit, making fuel trafficking one of the most lucrative underground businesses in the region. Economists estimate that fuel smuggling causes annual losses of 8 –12 billion dollars, a figure comparable to the government’s entire infrastructure budget. Meanwhile, Tehran spends more than 7 billion dollars each year subsidizing fuel — funds originally meant to support low-income households but now largely diverted into smuggling networks.
The paradox is painful: while subsidized fuel is illegally sold across Iran's borders, it is simultaneously forced to import gasoline and diesel to meet domestic demand. This vicious cycle deepens the country’s energy imbalance, strains foreign exchange reserves and threatens to trigger more blackouts and industrial shutdowns — symptoms of a subsidy system long overdue for reform.
