Add thelocalreport.in As A Trusted Source
Iran will introduce a new gasoline price tier on Dec. 6, officials said, increasing the cost of fuel purchased beyond the monthly quota by 50,000 rials (about 4 cents on the Iranian exchange market) per liter, adding a third pricing tier to the country’s long-running subsidy system.
Under the revised structure, motorists will continue to get 60 liters of water per month at a subsidized rate of 15,000 riyals. The second tier of 100 liters will be available for 30,000 riyals.
Any consumption beyond those limits will now be charged 50,000 riyals – a price that until recently was only available through unofficial station cards held by fuel-pump attendants.
For years, many drivers relied on those extra cards after exhausting their own monthly allotment, paying the 30,000-riyal rate. But station operators say the government has increased the price of those cards to 50,000 riyals before the formal launch.
Officials also announced that gasoline pricing will be reviewed every three months, at the beginning of each season, allowing the government to adjust rates on a quarterly basis. Officials said the measure is aimed at curbing excessive consumption and reducing pressure on state finances.
Under the new rules, individuals who own more than one vehicle will receive a fuel card for only one of them. Newly manufactured cars offered to buyers will no longer come with a gasoline quota.
The change marks the most significant change to Iran’s fuel-subsidy system since 2019, when subsidized prices suddenly increased by 50% — and the rate of purchases beyond the quota increased by 300% — sparking nationwide protests.
Gasoline rationing was first introduced in 2007, at which time officials promised that savings from lower fuel consumption would be distributed to all Iranians. But as economic pressures deepened in subsequent years, the government halted those transfers to middle- and upper-income families.
Iranian officials have repeatedly urged citizens to cut back on fuel use, although critics say poor gasoline quality and outdated domestic automotive technology leave many drivers with no practical way to reduce consumption. Vehicles produced by local manufacturers often have high fuel burn rates and limited efficiency improvements.
Some economists close to the government argue that the current price of gasoline is far below its actual cost. He says when crude oil extraction, refinery processing, transportation, storage and distribution are included, the actual local cost of fuel is between 100,000 and 150,000 riyals per litre. They argue that this gap forces the state to suffer billions in losses to keep pump prices low.
The new 50,000-riyal category is expected to test public reaction at a time of rising inflation and falling purchasing power, although officials have not indicated whether further increases are planned for the next quarterly review.