Hike in fuel prices comes as government looks to scrap subsidies
Iran has hiked fuel prices by 40% and scrapped its existing rationing programme for private motorists as the government seeks to cut down on subsidies to increase public finances.
As part of a new single-rate fuel price system, gas stations in the country will sell regular fuel for 10,000 rials ($0.36) a litre, said Naser Sajadi, head of national Iranian Oil Products Distribution Co., Bloomberg reported.
Under Iran’s previous subsidy program, which cost some $32 billion a year, monthly consumption of up to 60 litres was priced at 7,000 rials ($0.24) a litre.
Diesel prices will now rise to 3,000 rials ($0.09) per litre, up from 2,500 rials ($0.08), Tehran Times reported.
Meanwhile, premium gasoline will be sold at 12,000 rials, gas oil at 3,000 rials and jet fuel at 6,000 rials per litre, a spokesman for National Iranian Oil Products Distribution Co. said.
Iran is scaling back the subsidies, which along with international sanctions on its nuclear program, put immense pressure on public finances. The decision to hike fuel prices will bring in about $1.8 billion in revenue by March 2016, Saeed Laylaz, an economist, told Bloomberg.