TEHRAN, Iran - As the threat of economic sanctions over Iran's nuclear activities has helped push the price of crude over $78 a barrel, the country, the world's fourth-largest oil exporter, is struggling with the cost of its gasoline imports.
With demand far outstripping its domestic refining capacity, Iran buys foreign gasoline for slightly more than 50 cents a liter (about $2 a gallon) and sells it at the pump for about 8 cents a liter (less than 40 cents a gallon), the highest subsidies in the region.
The discount prices have further encouraged consumption and cut into the country's export windfall. Waste and pollution are rampant. The cheap gas is smuggled out to other countries at the rate of some two million gallons a day, according to one study by Parliament.
Months ago, Parliament acted to break this damaging cycle, reducing the budget for importing gasoline to $2.5 billion from $4 billion.
"We cannot use the income from oil to buy gasoline for over 5,000 rials per liter and give it to people for 800 rials," said Ismail Jabarzadeh, a member of Parliament. "We have postponed making this decision for many years, but eventually the right decision should be made."
Those funds will be exhausted by August.
Would be a pisser if they hit Iran where it hurt.