Iran Expects Drop in Gasoline Consumption after Price Change

Iran expects gasoline consumption to fall by at least 3 million liters a day and CNG use to increase after raising the price of gasoline sold through emergency fuel cards at service stations, the head of the National Iranian Oil Products Distribution Company said on Monday. Karamat Veys-Karami, speaking on live television, said the price of gasoline sold through emergency fuel cards, which account for most sales through station cards, would rise to IRR 100,000 (44.4 cents) starting at midnight on Tuesday. "The first and second rates and their corresponding quotas will remain unchanged," he said, according to Mehr news agency.

After years of challenges in the energy sector, Iran introduced a three-tier gasoline pricing system in December. Under the scheme, gasoline dispensed through emergency fuel cards at service stations was priced at IRR 50,000 (US$0.022) per liter, up from IRR 30,000 (US$0.0135). Gasoline has since been sold at three rates based on monthly consumption: IRR 15,000 (US$0.0067) per liter for the first 60 liters, IRR 30,000 (US$0.0135) for the next 100 liters and IRR 50,000 (US$0.022) for consumption above 160 liters. Veys-Karami said the aim of the latest adjustment was to reduce reliance on emergency fuel cards at service stations, according to ISNA. "Since December 2025, following implementation of the Cabinet resolution, the use of free fuel cards at service stations has fallen from 43% to 26%," he said. Turning to the country’s CNG capacity, Veys-Karami said Iran had substantial capacity to supply vehicles with compressed natural gas. "We have 2,500 CNG stations across the country and can supply 40 million cubic meters of CNG to vehicles," he said. He added that Iran has 4.3 million dual-fuel gasoline and CNG vehicles and said greater use of CNG by those vehicles could help reduce gasoline consumption. On gasoline production and consumption, he said, "There is a 10-million-liter gap between gasoline production and consumption; in other words, we are 10-million liters short every day."

"Since the beginning of this year, which started on March 21, gasoline production averaged 122 million liters and consumption 132 million liters in the first five months, leaving a 10-million-liter gap," he said. In the sixth month of the year, the average daily distribution of gasoline reached 145 million liters, Veys-Karami said, adding that the gap between production and consumption remained substantial during the month. President Masoud Pezeshkian said on Friday that his government would seek to curb gasoline consumption gradually, mainly through "non-price measures," and would avoid abrupt decisions that could shock the public. Pezeshkian made the remarks at a meeting on the country’s energy shortage, where officials reviewed gasoline production, reserves and distribution, as well as pilot projects in several provinces and measures to strengthen the resilience of the energy sector. Already under Western sanctions over its nuclear program, Iran also faces restrictions on trade through its southern ports amid a US naval blockade imposed as part of Washington’s pressure campaign following a 40-day US-Israeli war that began in late February. The blockade has constrained Tehran’s trade options, including in the energy sector. - Iran Daily