Iran has decided to ration gasoline and to increase prices by 50%, as the country is under pressure of US sanctions. Each private car will be allowed to buy 60 litres of gasoline per month at a cost of IRR 15,000/l (US$35.5c/l), up from IRR 10,000/l (US$23.7c/l) previously. Additional gasoline pruchases will be priced at IRR 30,000/l (US$71c/l). The price increase is expected to be unpopular and to contribute to inflation (already around 40%). However, the government is seeking to offset the loss in oil export revenues induced by international sanctions (aound US$60bn) and revenues from the price hike (around US$2.5bn/year) should be used to subsidise 18 million vulnerable families (around 60 million people).
Iran is struggling to meet domestic fuel consumption due to a lack of refining capacity aggravated by international sanctions limiting the import of spare parts for the refineries maintenance. In addition, fuel prices are kept artificially low for social reasons, contributing to rampant fuel smuggling to neighbouring countries (gasoline prices are much higher in Pakistan than in Iran).