Iran: Future Gasoline Plan Put on Hold

EghtesadOnline: The plan to ration gasoline and increase fuel price has been suspended for now, spokesman for the Majlis Presiding Board told reporters on Sunday.

News ID: ۷۴۷۲۴۶

06 May 2019

“The matter will be discussed at a joint meeting of the Majlis and government to find better ways of implementing the plan,” IRNA reported Behrouz Nemati as saying.

He noted that the exact date for the meeting has not been decided but it will be held “in the coming days”.

On May 1 reports went viral on social media and some local news outlets saying that gasoline rationing would start the next day, according to Financial Tribune.

It was said that every car owner would be eligible for 60 liters per month of petrol at 10,000 rials (7 cents) a liter and extra fuel (free market) would be sold for 25,000 rials (18 cents) per liter without restrictions.

Later in the day, Oil Minister Bijan Namdar Zanganeh and the National Iranian Oil Refining and Distribution Company said the reports are immature and that rationing or higher prices at the pumps would not start on May 2.

However, they did not completely deny the expected quota program, implying that it could be announced at a later date.

Ali Asghar Yousefnejad, a member of the presiding board of the parliament says in the current economic conditions raising fuel prices would have dire consequences and a negative impact on the already struggling economy.

“Majlis is against raising fuel prices as it would certainly increase inflation,” he said. “The issue has been put on hold by the government for now and no date has been set for implementing the plan”.

In the past higher fuel prices have resulted in a hike in the prices of goods and services -- from taxi fares, grocery and household appliances to healthcare and housing.

All said, some observers are of the opinion that consumption will not come down even if fuel prices rise. Locally-made cars are notorious for poor mileage and infamous as gas-guzzlers contributing terribly to the air pollution.

They also believe that the difference between the two rates (7 and 18 cents) is not very high and will not prevent avaricious smugglers from their illegal trade near the porous borders.

Those who oppose the rise in gasoline prices also mention that it could have implications far beyond filling stations as it would have a domino effect on all sectors.