Financial Times:

Bita Ghaffari in Tehran

Iran has brought in fresh petrol price increases, as US sanctions force the oil-rich country to import refined fuel.

Tehran is reducing fuel subsidies to save money, as its economy is under strain and it faces a widening energy crisis despite possessing the world’s third-largest oil and second-largest natural gas reserves.

President Masoud Pezeshkian said earlier this month most low-income groups did not benefit from the subsidies.

“Should I continue to spend foreign currency to purchase petrol, sell it at a fraction of the price, and then have no foreign currency left to provide essential goods for the people?” he asked, addressing university students in Tehran.

Fuel in Iran is among the cheapest in the world thanks to generous subsidies. But refining capacity is limited, partly due to under-investment caused by US sanctions. The country imports $6bn of petrol a year to fill the gap between domestic production and consumption, according to the government.

Under the new tiered system, motorists will be charged 50,000 rials ($0.04 at open market rates) per litre for any amount above a monthly quota of 160 litres. They can buy up to 60 litres a month at 15,000 rials ($0.012) and then an extra 100 litres a month at 30,000 rials ($0.024). Average salaries in Iran are around $200 a month.

Brand new and more expensive cars will not receive any monthly quota and will have to pay the higher rate, while owners of multiple vehicles will receive the quotas for only one car.
 

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