Iran may extend a plan to sell extra, higher priced gasoline outside a rationing system beyond an experimental period starting this month if the initial phase is a success, state media reported on Monday.
Iran, the world's fourth-largest crude producer, introduced gasoline rationing for motorists in June as part of a bid to curb consumption that was outstripping the Islamic Republic's ability to refine crude and meant it had to rely on imports.
Demand for fuel has soared in part because it is sold at 1,000 rials (about 11 US cents) a litre, some of the cheapest prices in the world, discouraging drivers from economising.
With rationing, drivers can only buy 120 litres a month which many complained was not enough. So the government proposed sales at between 5,000 and 7,000 rials (55-77 US cents), available outside rationed amounts. "If the sale of free (market priced) gasoline during the holiday is successful, this plan will continue after the (Iranian) New Year also," Mehdi Hashemi, head of a presidential committee for fuel prices, was quoted by state radio as saying.
The price for the extra fuel had not yet been set, he said. The experimental phase would start on March 15 before the Iranian New Year holiday and would last 25 days, he said. The Iranian New Year starts on March 20 and the holiday that follows is traditionally a period of peak travel.
The government has previously been reluctant to implement a system that would offer higher priced gasoline, a move backed by parliament, because of fears it would drive up inflation, which is already running at 19 percent. Heavy subsidies have been a drain on state coffers, another factor encouraging the government to try to curb usage.
Iran's parliament allocated $3.2 billion for the import of gasoline and diesel fuel as part of the budget for the 2008-09 fiscal year starting in March. In the past year, the government has spent $5 billion or more on imports.