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Iran scraps subsidized gasoline allowance

25 May 2015 17:13






Iranian motorists will see a monthly allotment of 60 liters of subsidized gasoline canceled from Tuesday.

The government is struggling to furnish monthly cash handouts to every Iranian, which is a legacy of former President Mahmoud Ahmadinejad after he scrapped subsidies and introduced a system of compensation.

Under the program, Iranians driving homemade cars could fill them with 60 liters of gas per month by using a smart card at the subsidized price of 70,000 rials (25 cents) per liter while without it they had to pay 35 cents.

From Tuesday, ever driver will pay 35 cents per liter at gas stations, officials said.

“Subsidized gasoline supplies were corrupting and had led to misuse by certain individuals,” head of the institute of fuel station owners Naser Raeesi-Fard told IRNA.

He said subsidized gasoline had given rise to smuggling in which a sizable volume of gasoline was being trafficked into Iran’s neighbors every month.

The news agency reported normal traffic at gas stations in the capital Tehran but there were already haggling between some commuters and cab drivers over fare hikes.

Iranian taxi drivers are seen at a terminal in Tehran. 

Inner-city transportation fares act as a barometer, with supermarkets and other retailers taking their cue to raise their prices by themselves.

Fuel prices in Iran are still among the cheapest in the world, which have resulted in a habit of prodigal consumption by many Iranians.

The government meanwhile has removed well-off citizens and the Iranians living abroad from the list of those receiving monthly cash allowances.

Labor and Social Welfare Minister Ali Rabiei has said the stipends had been cut to 200,000 wealthy Iranians and those living abroad.

In a recent letter, the minister said the situation was not sustainable and the government could not continue to dole out billions of dollars to the citizens every month.

The government is under pressure for its budget amid US-led sanctions and lower oil prices, with Minister of Economy Ali Tayyebnia saying the administration was running a debt of about $88 billion.

On Sunday, President Hassan Rouhani said Iran was under an “economic occupation” and the country needed to unite to liberate it.

“We must join hands and free our economic territory which was unjustly occupied by the countries of the P5+1,” he said, referring to the US, France, UK, Germany, Russia and China in nuclear negotiations with Iran.

Rouhani said the “enemies keep us from selling our oil”, while “we cannot send or receive money”.

“It is as if blood was prevented from flowing in our veins,” Rouhani was quoted as saying.

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