Iran’s parliament approved on Wednesday rationing subsidised gasoline, the Iranian ISNA news agency said, a move which would help insulate the fuel-importing nation from any possible extension of international sanctions.
Iran is OPEC’s second largest crude oil producer but does not have enough refining capacity to meet its domestic gasoline needs. This means it has to import about 40% of its requirements.
World powers are considering toughening United Nations sanctions on Iran because of its refusal to rein in its nuclear activities. But Western diplomats say fuel imports are unlikely to be targetted because it would hurt the public not the government.
Parliament approved rationing subsidised gasoline from May 22 and the government will decide on the ration quantity and price for unrationed fuel by April 20, ISNA said.
“With a positive vote of lawmakers gasoline will be rationed at a price of 1,000 rials (about 11 U.S. cents) per litre from the start of Khordad (the Iranian month beginning May 22),” ISNA reported.
Motorists pay 800 rials (about 9 U.S. cents) a litre, some of the cheapest fuel in the world. Analysts say such a heavy subsidy encourages waste, boosts smuggling to neighbouring states and is a hefty drain on government coffers.
Iranian laws have to be approved by the constitutional watchdog, the Guardian Council.
Lawmakers also backed a proposal that the cost of subsidising fuel should not exceed 22,250 billion rials ($2.4 billion), roughly the amount the government had proposed in its budget bill for the Iranian year starting March 21.
“The quantity of rationing and determining the proper price of unrationed gasoline will be proposed by the Management and Planning Organisation, and by the end of Farvardin (which ends on April 20) the government will pass it,” ISNA said.
Iranian officials previously said one proposal was for private motorists to receive a ration of about three litres of gasoline a week or 90 litres a month.
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