TEHRAN, March 7: Iran's parliament on Wednesday voted to cut the huge sums paid by the state to subsidise petrol by imposing a rationing system that would mean higher pump prices for purchases beyond a given quota.
Approving an amendment to the government's budget for the next Iranian year, parliament voted for consumers to continue buying petrol at extremely low subsidised prices -- but only up to the currently undefined quota.
"The gasoline produced domestically and imported will be sold at 1,000 rials (10 cents) a litre, at the latest from May 22, through rationing," the state run IRNA agency reported.
The legislation still has to be approved by the Guardians Council.
Under the amendment, the price of ordinary petrol will rise from its current level of 800 rials (eight cents) a litre to 1,000 rials (10 cents). No decision has yet been taken on the price of petrol beyond the quota, which is likely to be much higher.Parliament expressed a preference for smart cards to be used to carry out the rationing system.
Iran's rampant petrol consumption, encouraged by the current unlimited availability of cheap gasoline, forces Opec's number two producer to import 30 million litres of refined oil a day, at great cost to the budget.
The budget for the past Iranian year -- which ends on March 20 -- has set aside a colossal $4.7 billion to pay for petrol imports.
The problem of hungry consumption is compounded by Iran's refineries having a capacity of only 42 million litres of petrol a day in a country where demand stands at more than 70 million litres daily.
In addition, Iran loses millions of litres of petrol a month because of smugglers who take the gasoline out of the country to try to sell it for far higher prices in neighbouring Iraq, Turkey and Pakistan.
The size of the quota and price for petrol sales beyond a consumer's quota will be set by the government and the state Management and Planning Organisation.
"The level of the quota and pricing of non-quota gasoline should be recommended by the planning organisation and the oil ministry by April 20 and should be approved by the cabinet," IRNA said.
Parliament said the quota should be set so that the government's subsidy for imported petrol does not exceed $2.39 billion. —AFP