A gas station in Iran

Iran Tightens Gasoline Rationing Amid Shortages

Sunday, 05/28/2023

An Iranian official said Sunday that in addition to a limit on cheap gasoline for citizens, more expensive fuel will also be rationed, and limited to 150 liters per month.

Gasoline and other fuels are heavily subsidized in Iran, which coupled with refining limitations, has led to shortages this year according to the government.

In 2019, the government raised gasoline prices to 15,000 rials per liter, or less than 3 US cents in today’s exchange rates. At this price citizens were allowed to buy 60 liters per month, or 15.8 US gallons. But it sold unlimited gasoline at double the minimum price.

The new regulation caps the more expensive gasoline at 150 liters per individual, per month – or 40 gallons. The 60-liter allowance at the cheaper price remains in effect. Overall, gasoline, diesel and natural gas prices in Iran are among the lowest in the world.

Iran’s heavy fuel and electricity subsidies cost the country at least $50 billion a year, while the government struggles to secure foreign currencies amid US economic sanctions.

The government is entertaining the idea of raising fuel prices, but last time when it increased prices in 2019, fierce nationwide protests broke out. Government forces killed at least 1,500 people in one week and badly damaged the regime’s legitimacy.

Five years of economic crisis since the imposition of US sanctions have pushed annual inflation to near 70 percent and the national currency rial has lost its value 12-fold.

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