Daily Consumption Record of 140 Million Liters Registered, Energy Imbalance Intensifies in Iran

According to the CEO of the National Oil Products Distribution Company, gasoline consumption reached 140 million liters on Saturday of this week. Experts view this statistic as a sign of intensified energy imbalance in Iran and the resulting economic and social problems. Jafar Salari-Nasab told Mehr News Agency, "We are at peak consumption, and it seems that gasoline consumption will not exceed 140 million liters per day." The issue of gasoline imbalance and solutions to it is viewed with skepticism by analysts. Experts believe that the continuation of the current trend, which means an increase in the budget needed for fuel imports, is not feasible due to the current problems of the Islamic Republic, making it impossible to secure the necessary foreign currency for imports. Accordingly, the government is looking to control consumption through direct and indirect price increases. In this context, Massoud Pezeshkian stated at the beginning of Mordad (July) in an interview with the website of the Supreme Leader's office, "We have an energy imbalance in the country, and currently, we are paying $8 billion for gasoline purchases, meaning we buy gasoline for about 30 or 40 thousand tomans and sell it for 1,500 tomans. How long can we continue this?" Changes in gasoline pricing as a general policy dictated by the government were also raised by Pezeshkian's team during the competition for the succession of Ebrahim Raisi. Accordingly, in the early days of Tir (July), statements by Pezeshkian's campaign manager regarding the rising price of gasoline and energy carriers, alongside Pezeshkian's comments on fuel price liberalization, faced numerous criticisms and reactions on social media. On the 9th of Tir, following the announcement of the final voting results and Pezeshkian's advancement to the second round, Ali Abdolali Zadeh, head of Pezeshkian's campaign, stated, "If the government is a collaborative government, it should invite the same experts who say gasoline should be 50 thousand tomans to come on television for three nights, one supporter and one opponent each night, to discuss why energy carriers should increase in price and then talk about how to increase it. Should this 50 thousand tomans increase all at once or gradually over a year or two?" Massoud Pezeshkian had expressed his agreement with a 20 thousand toman gasoline price in 1400 (2021) in an interview with Tasnim News Agency, and in 1402 (2023), he stated in an interview with Ham-Mihan newspaper that he supports allocating gasoline quotas to those who do not own cars, believing that those without cars could alleviate some of the inflationary pressures and rising prices by receiving government gasoline quotas and selling them at free market prices. Pezeshkian's past approach and statements from his associates indicate that in the gasoline sector, one should expect a choice between two models: price increases or distributing gasoline to every citizen. Some experts believe that ultimately the government will implement a combination of these two models, initially distributing gasoline among all people to prepare for a price increase. Reza Ghaibi, an economic journalist, stated to Voice of America, "Since the government knows that following a price increase, it will incur heavy costs, it is trying to align the lower income brackets with these changes." According to Ghaibi, the government aims to benefit citizens by distributing gasoline to every citizen and allowing those without cars to sell it, thus creating a popular backing for itself regarding the price increase. This economic journalist also referenced the Oil Minister's remarks, indicating that the use of the term "currently" suggests the government's future plans for increasing gasoline prices. On the first of Shahrivar (September), the Oil Minister of Pezeshkian's government stated that "currently, there are no pricing solutions to address the gasoline imbalance." The Islamic Republic has a bitter memory of the last gasoline price increase, as protests erupted in November 1398 (November 2019) following a sudden rise in gasoline prices, starting on the night of November 24 in several cities, including Mashhad, Ahvaz, Khorramshahr, and Behbahan. The protests spread to 54 cities, and ultimately, the Islamic Republic resorted to cutting off the internet nationwide and killing protesters in various cities. On December 2, 1398, Reuters reported that approximately 1,500 protesters were killed during the crackdown on the November protests. Given the 50% increase in "technical imbalance" in electricity, experts consider the long-term solution to be "attracting foreign and private investment." The ongoing energy crisis in Iran has led to power outages for production units and residential customers in Lorestan and Semnan. An examination of the contradictions in Pezeshkian's behavior reveals a shift from justice-oriented campaign promises to reciting laments and emphasizing the previous government's policies. The electricity supply crisis has paralyzed Iran, with a newspaper reporting a month-long closure of some factories. An energy expert predicts "rationing" of gas, electricity, and gasoline in the "coming years." A governmental body reported that targeted subsidies have a shortfall of 230 trillion tomans. The fuel cards at gas stations will not be eliminated; the government has retreated until "further notice." The gasoline quota for internet taxis has been cut; a new round of fuel supply restrictions has begun.