Business | Oil & Gas
Iran to launch 'international' oil pricing in 2011
Iran, which has some of the cheapest fuel in the world, will begin selling gasoline at "international" prices in 2011, state radio said Friday.
- Reuters
- Published: 21:11 June 13, 2008
Tehran: Iran, which has some of the cheapest fuel in the world, will begin selling gasoline at "international" prices in 2011, state radio said Friday.
Iran is the world's fourth-largest oil producer but lacks enough refining capacity to meet domestic gasoline needs, forcing it to import large quantities which it then sells at heavily subsidised prices, burdening the budget.
In order to curb consumption it introduced rationing in June last year, allowing motorists to buy a maximum 100 litres per month at the price of 1,000 rials (around $.11) per litre.
The scheme was later amended to increase the subsidised quota to 120 litres per month and also to allow the sale of higher-priced gasoline for motorists who needed more, at four times the subsidised price.
The radio report cited Acting Interior Minister Mehdi Hashemi as saying the move to start selling gasoline at
international rates in three years' time was based on a parliament decision, without giving details.
Energy officials have previously said "international" prices meant selling unsubsidised gasoline, not that the cost would reach the same levels as in the West.
"The consumption of gasoline in the country is not as yet moderate and it is hoped it will attain moderation through the implementation of plans that go into effect stage by stage," Hashemi told state radio.
The government spends more than $100 billion per year on energy subsidies, covering also electricity and natural gas, officials say.
But Hashemi also said more public transport was needed to help curb gasoline consumption.
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