Iran's gasoline consumption has fallen by 20% on a year-on-year basis since
a four-fold price increase came into force, a top Iranian oil official said
Wednesday, as a broad overhaul of subsidies hit oil-products use.
The gasoline subsidy cut comes after a U.S. ban this summer on the country's
gasoline imports. Feared riots against the rise have not materialized so far
amid cash payments to compensate the less well-off and heavy police presence.
Farid Ameri, director of the National Iranian Oil Products Distribution Co.,
said "gasoline consumption was reduced about 20% and fuel oil 18%" on
a year-on-year basis in the eight days that followed the price hike, in
statements published on the company's website.
On Dec. 19, Iran
increased the price of petrol bought under a rationing system to 4,000 rials
($0.40) a liter from 1,000 rials ($0.10) a liter as part of a long-awaited
reform of the country's generous subsidies.
Under a reform plan adopted in January by parliament--before the gasoline
sanctions were imposed--Iran
planned to eliminate the subsidies on fuel, electricity and basic goods over
five years, while offsetting the financial hardship suffered by less well-off
families by making direct cash payments to their bank accounts.
The International Monetary Fund has welcomed the plans as a way to rebalance
the embattled Iranian economy. It says the subsidies plan specifies a revenue
target of $20 billion for the first year, which can be translated into a
certain increase in prices.
Just from the hike in water and electricity prices, the government will
generate revenues of $4.9 billion a year, the Mehr news agency quoted Energy
minister Majid Namjou as saying Sunday.
Iranians rioted in 2007 to protest fuel rationing. But the decision to pay cash
to make up for cut subsidies--along with a heavy police presence--has so far
avoided a repeat of the unrest.