The Status of Gasoline in Iran; What Do the Real Numbers Say?

Gasoline in Iran is not just fuel for vehicles; it is a key term and a reminder of one of the fundamental challenges of the Islamic Republic, especially in the last 15 years. In recent months, various claims have been made in the media, social networks, and public spaces regarding the amount of gasoline consumption and its price compared to other countries. Radio Farda has attempted in this report to provide a relatively clear and accurate picture of the status of gasoline in the country, based on reliable statistics and data, examining several important indicators and utilizing charts; from consumption statistics to a proper comparison of the amount consumed and its price with other countries and the inflationary effect of rising gasoline prices. What is the gasoline consumption in Iran? According to the latest statistics, gasoline consumption in the year 1402 (2023) reached 115 million liters per day, and by November 12, 1403 (2024), it rose to 125 million liters per day. The chart below illustrates the trend of average daily gasoline consumption over the past 20 years. In recent months, various claims have been made in the media, social networks, and public spaces regarding the amount of gasoline consumption and its price compared to other countries. Radio Farda has attempted in this report to provide a relatively clear and accurate picture of the status of gasoline in the country, based on reliable statistics and data, examining several important indicators and utilizing charts; from consumption statistics to a proper comparison of the amount consumed and its price with other countries and the inflationary effect of rising gasoline prices. According to the latest statistics, gasoline consumption in the year 1402 reached 115 million liters per day, and by November 12, 1403, it rose to 125 million liters per day. The chart below illustrates the trend of average daily gasoline consumption over the past 20 years. Is gasoline consumption in Iran significantly higher compared to other countries? Based on the latest available data for the year 2022, gasoline consumption statistics were higher in at least 9 countries worldwide than in Iran. In this year, gasoline consumption in the United States ranged from 1.4 billion liters per day to 118 million liters per day in Mexico. Meanwhile, the average daily gasoline consumption in Iran was reported to be about 105 million liters in 1401 and about 115 million liters in 1402. Despite all this, comparing Iran's situation with larger economies with different characteristics and geographies cannot be a proper comparison. For a better comparison, we should see how Iran stands relative to its regional and neighboring countries. If we evaluate Iran's situation in comparison to regional countries, it appears that Iran has the highest consumption statistics compared to other countries; however, considering the population factor, it becomes clear that Iran ranks sixth in per capita gasoline consumption, after the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, and Lebanon. Based on the latest available data for the year 2022, gasoline consumption statistics were higher in at least 9 countries worldwide than in Iran. In this year, gasoline consumption in the United States ranged from 1.4 billion liters per day to 118 million liters per day in Mexico. Meanwhile, the average daily gasoline consumption in Iran was reported to be about 105 million liters in 1401 and about 115 million liters in 1402. Despite all this, comparing Iran's situation with larger economies with different characteristics and geographies cannot be a proper comparison. For a better comparison, we should see how Iran stands relative to its regional and neighboring countries. If we evaluate Iran's situation in comparison to regional countries, it appears that Iran has the highest consumption statistics compared to other countries; however, considering the population factor, it becomes clear that Iran ranks sixth in per capita gasoline consumption, after the United Arab Emirates, Qatar, Saudi Arabia, Bahrain, and Lebanon. It should be noted that gasoline consumption in different countries depends on various variables such as the number of vehicles, the status of public transportation, and even the types of fuels used in vehicles. For example, gasoline is the dominant fuel for vehicles in Iran, while this is not the case in other countries. According to statistics, about 60% of light vehicles sold in Turkey in 2019 were diesel-powered, while in Iran, over 90% of light vehicles are gasoline-powered, and less than 10% of vehicles are dual-fuel (gasoline/gas) or so-called dual-fuel vehicles. As it appears, gasoline consumption in Iran, relative to its population, is not higher than other countries in the region, but it is high compared to some countries. Some experts consider the low price of gasoline to be the most important factor in 'high consumption'. Is the nominal price of gasoline in Iran the cheapest in the world? The value of each liter of free gasoline at 3,000 tomans in Iran currently ranges from 4 to 10 cents, depending on which dollar price (free dollar, exchange dollar, or preferential dollar) is considered. This figure is currently the lowest price in the world and is between one-sixth and one-twentieth of the price of gasoline in neighboring countries. The map below shows the nominal price of gasoline in Iran and neighboring countries on December 19, 1403. On this day, Israel has the highest average gasoline price in the region at two dollars and five cents. Following Israel, Jordan, Armenia, and Turkey rank next. At the bottom of the table, Iran has the lowest price in the entire region by far. After Iran, Egypt and Kuwait distribute the cheapest gasoline at 34 cents. However, this is not the whole story. If we calculate the price of gasoline relative to the average income of citizens, the equations will be somewhat different. According to the latest World Bank statistics, Iran in 2023 has a per capita income of 4,680 dollars per year, lower than Israel, the Gulf Arab countries, Turkey, Azerbaijan, Armenia, and Iraq, and higher than Jordan, Lebanon, Egypt, Pakistan, Syria, Yemen, and Afghanistan. Assuming a price of four cents for each liter of gasoline in Iran, the average national income would be equivalent to 116,000 liters of gasoline per year. With this in mind, considering average income, Iran ranks third after Kuwait and Qatar. The average income of each Kuwaiti is equivalent to 138,000 liters of gasoline, and the average income of each Qatari citizen is equivalent to 121,000 liters of gasoline per year. This ratio in Israel is about 27,000 liters, in Turkey less than 10,000 liters, and in Afghanistan less than 500 liters. To calculate this indicator, the Gross National Income (GNI) of regional countries in 2023 has been divided by the price of gasoline. According to the latest World Bank statistics, Iran in 2023 has a per capita income of 4,680 dollars per year, lower than Israel, the Gulf Arab countries, Turkey, Azerbaijan, Armenia, and Iraq, and higher than Jordan, Lebanon, Egypt, Pakistan, Syria, Yemen, and Afghanistan. Assuming a price of four cents for each liter of gasoline in Iran, the average national income would be equivalent to 116,000 liters of gasoline per year. With this in mind, considering average income, Iran ranks third after Kuwait and Qatar. The average income of each Kuwaiti is equivalent to 138,000 liters of gasoline, and the average income of each Qatari citizen is equivalent to 121,000 liters of gasoline per year. This ratio in Israel is about 27,000 liters, in Turkey less than 10,000 liters, and in Afghanistan less than 500 liters. Gasoline plays a very important role in the social and economic situation of the country, to the extent that in the last 15 years, any change in gasoline prices has been one of the fundamental challenges for governments and a very sensitive issue for Iranian society. One only needs to recall the protests of Aban 1398 (November 2019) that arose following the sudden increase in gasoline prices and quickly turned into widespread protests across the country against the government, resulting in a severe crackdown that left hundreds dead. Apart from the security and political aspects, the inflationary effect of rising gasoline prices on household economies, especially in the country's critical conditions, is also a very important and vital issue. What is the inflationary effect of rising gasoline prices? Experience has shown that the inflationary effect of gasoline, considering psychological impacts and economic conditions, is very variable and different. For example, the increase in gasoline prices in Aban 1398 immediately affected the inflation rate; however, the experience of the increase in gasoline prices in the years 1394 (2015) did not have a significant impact on the trend of inflation rates. At the time of the increase of one and a half to three times the price of gasoline in Aban 98, the Iranian economy was in a critical condition, and since 1397 (2018), the inflation rate without gasoline had been on an upward trajectory, but in 1393 (2014), under relatively stable inflation conditions, the increase in gasoline prices from 400 tomans (subsidized) to 1,000 tomans did not have a significant impact on the overall increase in the average household price basket. One only needs to recall the protests of Aban 1398 that arose following the sudden increase in gasoline prices and quickly turned into widespread protests across the country against the government, resulting in a severe crackdown that left hundreds dead. Apart from the security and political aspects, the inflationary effect of rising gasoline prices on household economies, especially in the country's critical conditions, is also a very important and vital issue. Experience has shown that the inflationary effect of gasoline, considering psychological impacts and economic conditions, is very variable and different. For example, the increase in gasoline prices in Aban 1398 immediately affected the inflation rate; however, the experience of the increase in gasoline prices in the years 1394 did not have a significant impact on the trend of inflation rates. At the time of the increase of one and a half to three times the price of gasoline in Aban 98, the Iranian economy was in a critical condition, and since 1397 the inflation rate without gasoline had been on an upward trajectory, but in 1393, under relatively stable inflation conditions, the increase in gasoline prices from 400 tomans (subsidized) to 1,000 tomans did not have a significant impact on the overall increase in the average household price basket. What is the share of gasoline in household expenses? According to official statistics, the average gasoline consumption in 1402 was about 115 million liters per day. In other words, the per capita gasoline consumption for each Iranian is slightly more than 1.35 liters per day or 41 liters per month. If we consider the free price of gasoline, each Iranian spends about 122,000 tomans monthly on gasoline, which amounts to about 390,000 tomans for each Iranian family; that is, less than two percent of household expenses in 1402. Considering the inflation effect and the fixed price of gasoline, it can be expected that this ratio has now reached about one and a half percent of household expenses.