Import of Super Gasoline Has Been Freed; First Step Towards Gasoline Price Increase

Tasnim News Agency reported the 'liberation' of super gasoline imports based on a resolution by the Cabinet of the Islamic Republic. This security-affiliated news agency stated: 'It is expected that imported super gasoline will be offered by the private sector at prices close to global prices.' Experts believe that this government action is the first step towards increasing gasoline prices, and we will soon witness fundamental changes in the amount of quotas and the price of free gasoline. An economic journalist in this regard told Voice of America: 'The government is looking to escape the crisis of imbalances in the energy sector and is relying heavily on the simplest solution, which is to raise prices.' Reza Ghaibi emphasized regarding this resolution: 'With the import and supply of super gasoline at global prices, the resilience of society and reactions to it will be measured, and in practice, the government will prepare public opinion for higher prices.' According to this economic journalist, super gasoline does not have general demand, and the government will practically be able to create a new rate in the gasoline market without inflationary pressure and subsequently bring other rates closer to it. Ghaibi also mentioned the government's potential plan for gasoline, stating: 'In the coming months, the government will reduce the current quotas for cars by half or less with a plan to allocate gasoline to all people, while simultaneously including all individuals with a national ID code in receiving subsidized gasoline.' According to Ghaibi, this action will be a precursor to the increase in free gasoline prices, and by creating the possibility for the sale of gasoline quotas for individuals without cars, it will financially benefit them to reduce the volume of potential protests. Ghaibi also referred to the budget bill for the next year, stating that the government has reduced the budget for gasoline imports next year, and given the daily intensification of imbalances, this action means a 100% increase in gasoline prices to control consumption. According to this report, the increase in imbalances is a factor that has prompted the Islamic Republic to strive for an increase in gasoline prices to manage its foreign exchange resources and expenditures. Experts believe that if the current trend continues, the amount of gasoline imports this year could reach $10 billion. This issue was emphasized by Masoud Pezeshkian in early August of this year in an interview with the website of the Leader of the Islamic Republic, stating: 'We have an energy imbalance in the country, and currently, we are paying $8 billion to buy gasoline, meaning we buy gasoline for about 30 or 40 thousand tomans and sell it for 1,500 tomans; well, how long can we keep doing this?' Media analysts believe that the government is trying to normalize the issue of gasoline price increases and surrounding discussions in the public mind to reduce a large part of the emotional reactions with tedious discussions. The Islamic Republic has a bitter memory of the last gasoline price increase, as protests in November 2019 began following the sudden rise in gasoline prices from the night of November 24 in several cities in Iran, including Mashhad, Ahvaz, Khorramshahr, and Behbahan. The scope of these protests spread to 54 cities, and ultimately, the Islamic Republic resorted to cutting off the internet in the country and killing protesters in various cities. On January 2, 2020, Reuters reported, citing sources within the Iranian government, that around 1,500 protesters were killed during the suppression of the November protests. The whispers of price increases and gasoline shortages in Iran are not related to sanctions; part of the government's plan is to increase gasoline prices next year, eliminate 'government subsidies' from airplane fuel, and increase '11-fold' fuel costs. A member of parliament announced the definite increase in gasoline prices next year.