TEHRAN: Iran is reintroducing fuel cards that will cap petrol purchases in a bid to combat rampant smuggling, state media reported on Tuesday.

Smuggling has boomed in recent months as the rial has plummeted against the dollar in the face of the reimposition of crippling US sanctions following Washington’s withdrawal from a landmark 2015 nuclear deal between major powers and Tehran.

The Islamic republic has some of the most heavily subsidised petrol in the world, with a pump price of around $0.08 per litre (less than two US cents per gallon).

Low fuel prices have led to high consumption, with Iran’s 80m population buying an average of 90m litres per day, according to state news agency IRNA.

They have also fuelled very high levels of smuggling — estimated at around 10 to 20m litres (2.2-4.5m gallons) per day, IRNA said.

Much of it heads across the border to Pakistan, where petrol costs 10 times, and diesel around 40 times, as much as in Iran.

Published in Dawn, November 21st, 2018