Reviving the gasoline rationing system can help combat the menace of fuel smuggling, a member of Iran's Oil Product Exporters' Association said.
"The country's gasoline consumption amounts to 100 million liters per day, of which 20 million liters are smuggled to neighboring states," Hassan Khosrojerdi was also quoted as saying by Tasnim News Agency on Wednesday.
According to the official, the substantial discrepancy between fuel prices in Iran, at 7 cents, and those in neighboring countries, at 75 cents, have turned fuel smuggling into a lucrative business. Even the government’s anti-smuggling regulations, such as heavy fines, have done little to curb the illegal fuel trade.
“Statistics issued by the National Iranian Oil Refining and Distribution Company show that Iranians burn close to 100 million liters of gasoline per day, yet it is very unlikely that the whole amount is consumed domestically, as a considerable volume is sold in border regions.”
Khosrojerdi noted that the more the dollar's exchange rate increases, the more fuel will be smuggled unless effective measures are adopted, such as introducing the previous gasoline rationing system and raising fuel price.
The official believes that the latter cannot be implemented due to its inflationary impact on people's lives, but the former needs to be activated again.
Fuel Cards
Mahmoud Ahmadinejad, the former president, started the plan to offer 60 liters of subsidized gasoline monthly to private cars via smart fuel cards at the rate of 7,000 rials per liter.
In 2015, the government stopped allocating subsidized gasoline to passenger vehicles and regular gasoline was offered at a single price of 10,000 rials (7 cents) for car owners nationwide without quota.
In 2007, the government started issuing electronic fuel cards across the country. In December 2010, as part of the first phase of the national subsidy reform plan, the government offered car owners monthly gasoline quotas. The subsidized price of rationed gasoline had increased since then, but still remained well below international prices.
Vehicle owners had been allowed to purchase extra fuel at higher prices, but even those prices were lower than international prices.
According to Asadollah Qarekhani, the spokesman of Majlis Energy Commission, a gasoline rationing system with two rates, which was eliminated by the current government in May 2015 to cut consumption, may be revived.
“The country is likely to introduce two rates for gasoline under a rationing system, if consumption is not curbed or we are pressured by the looming sanctions,” he said.
On May 8, US President Donald Trump announced that his country has unilaterally withdrawn from the Iran nuclear deal and the US Treasury Department plans to impose two rounds of sanctions on Iran in the coming months.
Stressing that no decision has so far been taken on raising gasoline price and fuel rationing, Qarekhani said the Oil Ministry is in charge of determining the new gasoline prices.
