Tuesday, August 24, 2010
Publish date: October 06 • Printable version    

Iran faces big budget shortfall for petrol imports

Iran is facing a six-and-a-half-billion dollar budget shortfall for its petrol imports this year. Iranian financial dailies reports that Oil Ministry officials are planning to present the parliament with a bill to approve a budget supplement of six and a half billion dollars.
Donya-ye Eghtesad daily describes this as “an unprecedented and record-breaking budget supplement.”

Petrol rations in Iran assign 100 litres per month for every vehicle which is sold at 1000 rials. Some Members of Parliament have criticized “unlawful” petrol imports by the government. This year Iran’s parliament has passed a bill that requires the government to charge 1000 rials per litre for domestically produced petrol and 4000 rials for imported ones. The government is also forbidden from assigning subsidies to imported petrol or using any other sources for its expenses.

Despite being a major oil producer, Iran is unable to meet its domestic needs for petrol due to limited refining capabilities. Rationing of petrol has been one strategy to reduce dependence on imported petrol.

The government pays out large sums in subsidies to control the price of petrol. Iranian authorities claim the government spends 100 billion dollars per year on energy subsidies which includes electricity, natural gas as well as petrol subsidies.

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