Iran’s growing reliance on imported gasoline has become one of the government’s most pressing financial headaches, pushing policymakers toward a strategic rethink of the country’s fuel policy. Officials warn that the escalating cost of importing gasoline into an oil-rich nation is straining the state budget at a time when foreign exchange resources are already tight.
Oil Minister Mohsen Paknejad said on Wednesday that Iran “has no problem selling oil,” despite long-standing sanctions and logistical constraints. But on the domestic front, fuel consumption and rising import bills have created a much deeper challenge. “We have had similar restrictions in past years and we act according to the circumstances,” he said, emphasizing that quotas and gasoline prices will remain unchanged for now.
Gasoline prices in Iran remain heavily subsidized, standing at 1.5 cents per liter for quota fuel — a level far below regional and global prices (average 100 cents per liter). Still, the cost of imported fuel is becoming unsustainable. According to the minister, gasoline imports have reached levels that are “painful” for the state budget, forcing the government to evaluate a range of policy options. Any decision, however, will go beyond the Oil Ministry. A special inter-agency task force has been formed to assess the broader implications of pricing, consumption, and potential reform scenarios.
Paknejad acknowledged the policy dilemma: while higher prices or multi-tier pricing could curb consumption, even the psychological impact of such changes could feed into inflation expectations. “This must be managed carefully,” he said, stressing that no policy should create hardship for the public.
He added that the first objective is to improve fuel efficiency and reduce domestic consumption, noting that a significant share of national resources is currently spent on gasoline imports. With demand rising and subsidies unchanged, Tehran now faces a difficult balancing act: safeguarding public welfare while preventing imported gasoline from becoming an even larger fiscal burden.
