Iran to Ration Gasoline, Raise Price By 20%

TEHRAN -- The Iranian Parliament decided Wednesday to ration gasoline, starting in May, the official IRNA news agency reported. As part of its ratification of the budget bill for the Iranian fiscal year beginning March 21, the country's parliament also increased the price of gasoline in the rationing system from 800 Iranian rials a liter ($0.09) to IRR 1,000/liter. The price to be paid by consumers for additional gasoline consumption beyond the rationed quota is yet to be decided by the government. Iran has one of the cheapest gasoline prices in world. Both the government and parliament have had reservations about dabbling with the price because of its impact on the already-high inflation rate. Distribution of gasoline under the rationing system will be through the use of a smart card which is being distributed among registered car owners. The amount of gasoline to be distributed under the rationing basis is yet to be decided by the government. Iran imports about 40% of its daily gasoline needs from abroad due to refining capacity limitations, making it one of the world's biggest importers of gasoline. Gasoline consumption has been around 70 million liters a day in Iran, but this has risen to 80 million liters a day because of the approach of the new Iranian year. The cost of imports was officially $5 billion in the current year, but a $9 billion annual cost has been mentioned if consumption is left uncontrolled. The government and Parliament have differed on the manner of dealing with gasoline overconsumption. The government has been in favor of rationing while the Parliament is in favor of dual pricing.