Title: Iran Announces Fuel Subsidy Policy: Stability for Citizens, New Measures for Government and Luxury Vehicles
In a significant announcement, the Iranian government has clarified its future fuel subsidy strategy, emphasizing stability for the public while targeting reforms in specific sectors. After months of public speculation, officials have confirmed that the current subsidized gasoline quotas for citizens will remain unchanged.
Core Subsidy Rates Unchanged
Government Spokeswoman Fatemeh Mahagerani explicitly stated that there are no plans to alter the current quota prices for gasoline. “The government has no intention of changing the price of quota-based gasoline,” she confirmed. “The gasoline considered as people’s quota will continue to be supplied at the rates of 1,500 and 3,000 tomans.”
This decision ensures that the vast majority of vehicle owners, estimated at 95% of the population, can cover their monthly fuel needs with the existing subsidized system, which provides 60 liters at 1,500 tomans and 100 liters at 3,000 tomans per month.
New Focus: Government and Luxury Consumption
While securing public subsidies, the government revealed that new policies are being finalized for specific categories. These include government vehicles, luxury cars, and fuel sold in the country’s free trade zones. The details and implementation timeline for these measures are to be announced later.
A key pillar of the new approach is that the government will lead by example. Jafar Ghaimpanah, the Vice President for Executive Affairs, had previously stated that if any changes to energy carrier rates were to occur, the government would start with its own consumption, whether in electricity, gas for state buildings, or gasoline for its vehicle fleet.
Combating Fuel Smuggling a Priority
The government also underscored its commitment to tackling fuel smuggling, which it identifies as a major challenge. Mahagerani highlighted the significant cost to the state, noting that gasoline which costs the government approximately 30,000 tomans per liter to produce is sometimes smuggled out of the country. She reaffirmed that “the quotas remain in place, but we cannot allow fuel to be smuggled out.”
This focus aligns with broader statements from other branches of government on the importance of curbing this illegal trade to protect national resources.
A Gradual and Considered Approach
The announced policy reflects a deliberate and internally-driven strategy for energy sector reform. By starting with state institutions and maintaining public subsidies, the government aims to implement changes without directly imposing a heavy burden on citizens. Officials, including President Masoud Pezeshkian, have stressed that the public will not be caught off guard by any future decisions, with any potential changes being communicated transparently in advance.
This measured approach, which considers both domestic stability and the challenging experiences of other oil-rich nations with subsidy reforms, signals a new phase in Iran’s energy policy focused on rationalization and the protection of national resources.