After weeks of reduced gasoline supplies and kilometer-long queues at filling stations, the government raised the non-quota price to 100,000 rials per liter, roughly 4.3 US cents.
Iran now has a three-tier gasoline pricing system. Each vehicle receives 60 liters per month at 15,000 rials per liter, or about 0.65 US cents, and another 50 liters at 30,000 rials, or about 1.3 cents. Gasoline purchased beyond those quotas costs 100,000 rials per liter, double the previous non-quota rate.
Government spokesperson Fatemeh Mohajerani has said the increase will not affect around 85 percent of car owners because their monthly consumption remains below the combined 110-liter subsidized quota.
At first glance, selling gasoline for only about 4.3 cents per liter while continuing to provide 110 liters per month at significantly lower subsidized rates may make the financial impact of the increase appear limited.
But the figures suggest the government could still raise several hundred million dollars annually. Whether the policy can substantially reduce consumption or Iran’s dependence on gasoline imports is another matter.
Government revenue
Iranian authorities have not published detailed current figures showing exactly how much gasoline is sold at each of the three price tiers.
But with roughly 22 million gasoline-powered passenger cars and a combined monthly quota of 110 liters per vehicle, those vehicles could consume a maximum of around 80 million liters of subsidized gasoline per day even if every driver used the full quota.
With national gasoline consumption at roughly 134 million liters per day, that would leave about 54 million liters being consumed outside the subsidized quotas.
That estimate is broadly consistent with remarks last November by the head of the National Iranian Oil Products Distribution Company, who said around 40 percent of gasoline refueling was being carried out using emergency cards provided at filling stations rather than motorists’ personal fuel cards.
A confidential 94-page report by the National Iranian Oil Refining and Distribution Company reviewed by Iran International puts average gasoline consumption in the Iranian year 1403, which ended in March 2025, at around 124 million liters per day, including additives and petrochemical products.
If around 54 million liters continue to be purchased each day at the non-quota rate, the additional 50,000 rials charged per liter would generate roughly 98.5 trillion rials over a year.
At the current exchange rate of around 2.3 million rials per dollar, that amounts to approximately $428 million.
The figure is a scenario based on current consumption patterns rather than a firm revenue forecast. The higher price could encourage some motorists to reduce consumption or rely more heavily on their subsidized quotas.
The government has also eliminated subsidized gasoline quotas for newly registered and imported vehicles, requiring them to purchase fuel at the non-quota rate.
Customs and Industry Ministry data show that Iran has added an average of around one million domestically produced or imported vehicles to its roads annually over the past five years.
Once a full year’s cohort of around one million additional vehicles is subject to the higher rate for 12 months, assuming average monthly consumption of 120 to 150 liters per vehicle, the latest increase could generate about another $35 million in annualized revenue.
Under these assumptions, the government could eventually generate less than half a billion dollars in additional annual revenue from the higher gasoline price.
Can higher prices ease the shortage?
According to Central Bank of Iran statistics, the country imported approximately $2.9 billion worth of gasoline last year.
Iranian officials say the country currently needs to import around 10 million liters of gasoline per day, with the cost at regional market prices broadly comparable to last year’s import bill.
President Masoud Pezeshkian has repeatedly argued for higher gasoline prices, saying it makes little sense for Iran to purchase gasoline abroad at much higher prices and then sell it domestically at heavily subsidized rates.
But even if the higher non-quota price generates close to $500 million annually, that would amount to only around 17 percent of the $2.9 billion Iran spent on gasoline imports last year.
The additional revenue, therefore, would not come close to covering the country’s gasoline import costs.
Officials have also argued that higher prices could reduce consumption. But many of Iran’s heaviest gasoline users work in freight transport, passenger transport and other service-sector businesses that depend directly on vehicle use.
For those workers, consuming less gasoline can also mean earning less income rather than simply cutting unnecessary fuel use.
Other structural factors are simultaneously increasing gasoline demand.
Official statistics show that CNG supplies for dual-fuel vehicles have declined every year over the past five years as Iran’s natural-gas shortage has worsened.
CNG consumption fell to around 16 million cubic meters per day last year, 38 percent below its 2020 level. The decline is equivalent to adding roughly 9 million liters to daily gasoline demand.
Iran has also not commissioned a new oil refinery since 2018, while around one million vehicles continue to be added to the domestic fleet each year.
The combination of rising vehicle numbers, declining CNG availability and limited refining capacity is therefore likely to deepen the gasoline deficit and increase Iran’s need for imports even if higher prices curb some demand.
The continued depreciation of the rial poses another problem.
The US dollar has gained around 120 percent against the rial since September 2025. If the currency continues to weaken, part of the additional revenue generated by the gasoline increase will quickly lose value in dollar and real terms.
There is also inflation.
Iran’s 12-month average inflation rate has climbed to nearly 70 percent, while food prices are around 128 percent higher than a year ago.
Higher gasoline prices can feed directly into transportation costs and, in turn, the prices consumers pay for goods and services. A policy that generates less than half a billion dollars in additional revenue could therefore impose broader costs on households already struggling with steep price increases.
The much larger cost of sanctions
The sums involved become even smaller when compared with the economic losses associated with sanctions on Iran’s oil exports.
According to Central Bank statistics, Iran generated $57.4 billion in oil-related exports last year when its crude and petroleum-product exports were valued at Gulf market prices.
That represents their nominal market value. The amount Iran ultimately receives is substantially lower.
Homayoun Falakshahi, a senior analyst at commodity intelligence company Kpler, told Iran International that around 25 to 30 percent of Iran’s oil revenues are lost between loading and delivery because of the mechanisms required to circumvent sanctions.
Those costs include discounts offered to Chinese buyers, payments to brokers, falsification of shipping documents, ship-to-ship transfers, longer transit times, floating-storage costs and the expense of chartering vessels belonging to the so-called shadow fleet.
On that basis, Iran lost an estimated $15 billion to $17 billion last year from the oil it actually exported because of discounts and sanctions-circumvention costs.
There is also the oil Iran was unable to export.
Iran’s crude exports in 2025 averaged around one million barrels per day below pre-sanctions levels. At prevailing prices, the value of that foregone export volume was approximately $25 billion a year.
Taken together, those figures suggest Iran suffered more than $40 billion in potential oil-revenue losses and additional export costs associated with sanctions last year.
That is around 80 times the less than $500 million in additional annual revenue the government could generate from the gasoline measures under current consumption assumptions.
The gap has widened further this year.
Since mid-July, the movement of newly loaded Iranian crude from the country’s oil terminals toward final overseas markets has effectively ground to a halt.
Some crude has continued to be loaded, but instead of heading to its final destination, much of it has accumulated offshore in waters south of Iran. Around 55 million barrels of Iranian oil are currently held in floating storage there and effectively trapped inside the maritime blockade.
Deliveries to China have nevertheless continued because not all of the crude arriving at Chinese ports was recently loaded in Iran.
Kpler data obtained by Iran International show that Iranian crude discharged in China averaged around 500,000 barrels per day last month, down from roughly 800,000 barrels per day in June and July.
Much of that oil had left Iran earlier and was drawn from previously accumulated floating stocks in Asian waters.
That explains how Iranian crude can continue arriving in China even as the movement of newly loaded oil from Iran to overseas markets has largely stopped.
The comparison underscores the scale of Tehran’s economic problem.
The government could raise less than half a billion dollars annually by charging consumers more for gasoline, yet the price increase does little to address the structural forces driving Iran’s gasoline deficit, while the country simultaneously faces tens of billions of dollars in lost oil revenues and sanctions-related costs.
