Difference between revisions of "Fuel Prices Iran"

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{{Fuel Price Factsheet
 
{{Fuel Price Factsheet
 
|Fuel Price Country=Iran
 
|Fuel Price Country=Iran
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|Fuel Pricing Policies="Pricing policy: Government controls and subsidizes fuel prices. Parliament ratified the Targeted Subsidies Reform Act in Mar 2010, calling for gradually increasing fuel prices to no less than 90% of the Persian Gulf FOB prices between 2010 and 2015, and similarly increasing natural gas, power, and water tariffs. The first price increase was implemented in Dec 2010, and introduced three different price levels for regular gasoline and two for diesel, depending on the consumer category. For regular gasoline, government vehicles and those used mostly in agriculture and industry were in the first price category until Jun 2011, after which this category was eliminated altogether; domestic vehicles with an engine size smaller than 2 liters in the second, with the engine size reduced to 1.8 liters in Jan 2013; and all others in the third. For diesel, public transport and industry are in the second category and others in the third. There is a quota for each category, depending on vehicle type, size, and location. The large price increases invited much criticism from Parliament, which in 2012 amended the Targeted Subsidies Reform Act to change “no less than 90%” of FOB prices to “no more than 90%,” thereby turning price floors into ceilings and entrenching price subsidies. Parliament rejected the proposal to increase prices in 2012, and depreciating currency means that domestic prices are declining in real terms. Nevertheless, it is significant that price increases as large as the ones effected in Dec 2010 were not rolled back. Government combined an effective communication strategy with nationwide cash transfers to mitigate the adverse effects of price increases for petroleum products, natural gas, electricity, and water.
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Social protection and compensation: To compensate for higher energy prices, the reform law authorizes using up to 50% of the savings from subsidy reduction for cash and in-kind payments to families, taking their income levels into account, and for a social security system; 30% of the savings to provide soft loans and credit lines to industries; and the remaining 20% to other government programs and infrastructure investment. In 2011, government did not target cash transfer to low-income households and instead paid Rls 455,000 (US$43 at the official exchange rate in 2011) a month to virtually all Iranians (about 73 million recipients), the total amount of which exceeded the savings from all the price and tariff increases of about Rls 30 trillion. Parliament in 2012 increased the allocation to cash transfers to families from 50% to 80%.
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Effect on demand: The consumption of every fuel fell in 2011, led by a 36% drop for fuel oil, 11% for LPG, and 10% for diesel. Apparent consumption, however, increased markedly in 2012."
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(Source: Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)
 
|Fuel Currency=IRR
 
|Fuel Currency=IRR
 
|Fuel Price Exchange Rate=10355
 
|Fuel Price Exchange Rate=10355
 
|Fuel Price Exchange Rate Date=2010/11/15
 
|Fuel Price Exchange Rate Date=2010/11/15
|Fuel Price Last Updated=
 
|Fuel Price Composition Date=
 
 
|Fuel Price Composition Annotation=No information available.
 
|Fuel Price Composition Annotation=No information available.
|Fuel Pricing Policies=Currently, Iran operates a quota two-tier price system. Under this rationing scheme, introduced in 2007, a motorist can buy 60 litres of subsidised fuel per month for around $0.11 per litre, and beyond that amount they have to pay a “semi-subsidised” price of approx. $0.4. Taxi drivers are allowed a higher subsidized ration per month.
+
|Fuel Matrix Pricing Mechanism=1
 
Plans to drastically reduce spending on energy subsidies were approved by Parliament and signed into law in January 2010. The law does not specify the price increases for the first year, but states the medium-term objective of the quasi-elimination of subsidies on par with the international f.o.b. price. Furthermore, it has a revenue target in the first year of $20 billion. Since December 2010 motorists receive 60 litres of fuel per month at a subsidised price of 40 cents per litre, up from 10 cents per litre.
 
 
 
The decision to remove subsidies comes as pressure from recent UN security council sanctions targeted at Iran’s nuclear program are making it increasingly difficult for Iran to secure its refined oil needs. Despite its huge energy reserves, Iran lacks refining capacity and imports a significant amount of its petroleum product needs. This led to media reports - denied by officials - of gasoline shortages and scattered reports of long fuel lines.
 
 
 
Status as of: 19.12.2010
 
 
|Fuel Matrix Price Level=1
 
|Fuel Matrix Price Level=1
|Fuel Matrix Pricing Mechanism=1
 
 
|Fuel Transparency Price Composition=1
 
|Fuel Transparency Price Composition=1
 
|Fuel Transparency Pricing Mechanism=1
 
|Fuel Transparency Pricing Mechanism=1
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|Fuel Price Factsheet Source Link=http://www.imf.org/external/pubs/ft/survey/so/2010/int092810a.htm
 
|Fuel Price Factsheet Source Link=http://www.imf.org/external/pubs/ft/survey/so/2010/int092810a.htm
 
}}
 
}}
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[[Category:Iran]]

Latest revision as of 12:58, 13 October 2014

Part of: GIZ International Fuel Price database
Also see: Iran Energy Situation

Fuel Pricing Policies

Local Currency: IRR
Exchange Rate: 10355


(2010/11/15)

Last Update:

"Pricing policy: Government controls and subsidizes fuel prices. Parliament ratified the Targeted Subsidies Reform Act in Mar 2010, calling for gradually increasing fuel prices to no less than 90% of the Persian Gulf FOB prices between 2010 and 2015, and similarly increasing natural gas, power, and water tariffs. The first price increase was implemented in Dec 2010, and introduced three different price levels for regular gasoline and two for diesel, depending on the consumer category. For regular gasoline, government vehicles and those used mostly in agriculture and industry were in the first price category until Jun 2011, after which this category was eliminated altogether; domestic vehicles with an engine size smaller than 2 liters in the second, with the engine size reduced to 1.8 liters in Jan 2013; and all others in the third. For diesel, public transport and industry are in the second category and others in the third. There is a quota for each category, depending on vehicle type, size, and location. The large price increases invited much criticism from Parliament, which in 2012 amended the Targeted Subsidies Reform Act to change “no less than 90%” of FOB prices to “no more than 90%,” thereby turning price floors into ceilings and entrenching price subsidies. Parliament rejected the proposal to increase prices in 2012, and depreciating currency means that domestic prices are declining in real terms. Nevertheless, it is significant that price increases as large as the ones effected in Dec 2010 were not rolled back. Government combined an effective communication strategy with nationwide cash transfers to mitigate the adverse effects of price increases for petroleum products, natural gas, electricity, and water.

Social protection and compensation: To compensate for higher energy prices, the reform law authorizes using up to 50% of the savings from subsidy reduction for cash and in-kind payments to families, taking their income levels into account, and for a social security system; 30% of the savings to provide soft loans and credit lines to industries; and the remaining 20% to other government programs and infrastructure investment. In 2011, government did not target cash transfer to low-income households and instead paid Rls 455,000 (US$43 at the official exchange rate in 2011) a month to virtually all Iranians (about 73 million recipients), the total amount of which exceeded the savings from all the price and tariff increases of about Rls 30 trillion. Parliament in 2012 increased the allocation to cash transfers to families from 50% to 80%.

Effect on demand: The consumption of every fuel fell in 2011, led by a 36% drop for fuel oil, 11% for LPG, and 10% for diesel. Apparent consumption, however, increased markedly in 2012."

(Source: Kojima, Masami. (2013, forthcoming). “Petroleum product pricing and complementary policies:Experience of 65 developing countries since 2009.” Washington DC: World Bank.)

Fuel Prices and Trends

Gasoline 95 Octane Diesel
in USD*

in Local Currency

* benchmark lines: green=US price; grey=price in Spain; red=price of Crude Oil



Fuel Price Composition

Price composition.



No information available.



At a Glance

Regulation-Price-Matrix
Transparency of
Price Composition
Transparency of Pricing
Mechanism / Monitoring
IFPDB matrix background.png
IFPDB matrix point.png
IFPDB trafficlight red.png IFPDB trafficlight explanation.png IFPDB trafficlight red.png



Sources to the Public

Type of Information Web-Link / Source
Other Information http://www.imf.org/external/pubs/ft/survey/so/2010/int092810a.htm


Contact

Please find more information on GIZ International Fuel Price Database and http://www.giz.de/fuelprices

This is a living document. If you have any comments or suggestions, please feel free to contact us: Armin.Wagner@giz.de