Given the huge difference between fuel prices in Iran and the neighboring countries due to the dramatic rise in foreign exchange rates in recent months, fuel smuggling has increased tremendously. Under the conditions reviving fuel rationing and issuing fuel cards can help solve the dilemma, a lawmaker said.
Ali Bakhtiar says so far, the Majlis has not granted permission to the government to ration the fuel, “but it is likely to do so in the near future”.
The MP referred to the fiscal 2018-19 budget law that obliges the government not to increase fuel prices, ISNA reported.
Observers including Bakhtiar believe that raising fuel prices will (as some experts suggest) push up prices of all goods and services inside the country, especially given the poor state of the economy, galloping inflation and steep rise in almost everything in the local marketplace that has already created frustration among large sections of the population.
"There have been unofficial meetings among some lawmakers regarding the fuel price issues. Reviving the rationing system and reordering fuel cards could be introduced in the next fiscal (begins in March 2019)," Bakhtiar said.
In the recent past senior government officials, especially advocates of the market economy, have strongly opposed calls for rationing gasoline and insist that such methods give rise to corruption and fraud at the pumps.
The new scheme reportedly would likely require fuel to be sold at two rates and each cardholder will be eligible for 90 liters of fuel per month at 10,000 rials (7 cents) per liter, he said ($1=150,000 rials). Motorists will be able to buy any amount of gasoline at a higher (free market) price. The parliamentarian did not say anything about the so-called free market rates.
“Smart fuel cards will register how much fuel is bought by a car owner and in essence make the smuggling business a very discouraging if not impossible enterprise.”
Daily gasoline consumption nationwide is about 100 million liters, of which 10 million liters is smuggled. The huge discrepancy between subsidized fuel prices in Iran (7 cents) and those in neighboring countries (up to $1.15) has been very tempting for smugglers in the border regions.
Gasoline rationing plan was launched in 2007 to reduce fuel consumption. At that time motorists could buy 60 liters of subsidized gasoline each month via the special card at 7,000 rials (70 cents) per liter (at the time one dollar fetched 10,000 rials).
In 2015, the government scrapped that policy and regular gasoline was sold at a single price of 10,000 rials (30 cents) per liter nationwide (then the dollar exchange rate stood at 35,000 rials).