Middle East

Iran to axe motorists allowance for subsidised fuel

Industry news

Iran is set to abolish motorists’ allowance for heavily subsidised fuel and set a price, according to the country’s deputy oil minister.

The move is being made as the government makes careful steps to cut back on costly handouts.

According to reports, Abbas Kazemi said petrol would now be sold at a single rate of $0.35 per litre.

The government is looking to curb subsidies which have led to profligate energy consumption and put a strain on public finances, which have already been affected by international sanctions and the drop in oil price last year.

The country has become used to heavy subsidies, particularly in the energy sector.

In 2007, there was widespread rioting when an allowance was first introduced to limit motorists’ access to the cheapest-priced fuel.

The change is likely to take effect in mid-September.

At the moment, eligible motorists receive an allowance of 60 litres of petrol a month at $0.24 a litre.

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