Iran Hits Bottom Of Barrel On Gasoline Supply
Amid nationwide strikes by workers in Iran’s energy production industry, officials have warned that the country is facing serious problems in supplying gasoline.
Amid nationwide strikes by workers in Iran’s energy production industry, officials have warned that the country is facing serious problems in supplying gasoline.
Hossein Aghayan, a former director of the supply department of the National Iranian Oil Refining and Distribution Company (NIORDC), says the rise in gasoline consumption is a result of heavily subsidized low prices, ILNA reported on Sunday.
The NIORDC is part of the country’s oil ministry and performs all operations relating to refining and distribution of oil products.
“One of the reasons for the growth of consumption is that the price is low. When they did not raise the price of gasoline at the right time, they should have expected its consequences,” Aghayan said, noting that if the authorities move to increase the price now, it will have a detrimental effect on an already inflation rate and will lead to increase in prices of other goods.
“If the prices are not raised, the unbridled rising consumption will continue,” Aghayan warned.
As part of a populistic approach to the economy, the Islamic Republic sells gasoline at extremely low prices, charging less than 10 US cents per gallon, or less than 3 cents per liter, while neighboring oil-producers have much higher prices, more in line with international market rates.
For years there has been talk of adjusting prices, but since 2018 Iran’s currency has dropped 12-fold and any increase needs to be very big to meaningful in US dollars.
One of the reasons that the Islamic Republic did not manage to increase fuel prices was the fear of triggering more protests, as the country was convulsed by the boldest wave of unrest following the death in custody of Mahsa Amini in September 2022.
In November 2019, a government decision to increase fuel prices by 50–200 percent triggered a cycle of protests and unrest across the country that lasted for over two weeks. During this time, angry protesters torched hundreds of gas stations, banks, and government buildings.
In March, Iran International released a classified document outlining the proceedings of a meeting of various government officials from different departments at the presidential office in late February according to which strategic fuel reserves had dropped to a dangerously low level, forcing major repairs at refineries to be delayed allowing maximum production for the time being.
The meeting decided to advise officials to avoid any public remarks or suggestions that could be interpreted as an intention to raise current fuel prices.
According to Aghayan, the main concern of the authorities at the moment is controlling the supply chain so that long lines would not form at the gas stations across the country.
He also made several suggestions on how to control the consumption of gasoline, such as stricter rationing plans and decreasing daily quotas for citizens, as well as raising fuel prices more than threefold.
“In the past, we imported super or premium gasoline and mixed it with light naphtha, and there was no problem, but if we want to supply high-quality gasoline, we have to import it,” Aghayan underlined.
In addition to extremely low prices that do not encourage saving fuel, Iran also faces gasoline and diesel shortages due to a lack of refining capacity. The low prices also lead to millions of liters of fuel being smuggled out of Iran daily, which betrays a large-scale smuggling network.
The NIORDC head, Jalil Salari, said on Saturday that about 10 million liters of diesel fuel is smuggled out of the country per day, claiming that it is about 10 percent of the country’s total daily production.
Iran has one of the biggest reserves of oil and natural gas and its economy is chiefly dependent on the revenues from crude oil exports. But due to sanctions and mismanagement it has failed to modernize the energy sector in general, with power shortages most of the year.
Systematic corruption is not something new in Iran's oil-dependent economy but recently criticism is intensifying over the government’s energy management. The situation has been grave in the past several years but since the administration of Ebrahim Raisi assumed office in 2021, the entire energy management system is going haywire even faster, drawing backlash from people and even regime officials.
Russia has also started exporting gasoline and diesel to Iran by rail this year for the first time since it lost its traditional customers over its invasion of Ukraine.
Since Saturday, workers of the oil, gas and petrochemical industries in Iran startedanother round of strike demanding wage increases in the face of more than 50 percent annual inflation.
The meeting which was a nocturnal fast-breaking party during the last week of Ramadan, was attended by the incumbent speaker of the Iranian parliament (Majles) Mohammad Bagher Ghalibaf, who calls himself a neo-con, and his predecessors, Ali Larijani, a moderate conservative politician, ultraconservative Gholam Ali Haddad Adel, whose political stances are aligned with the Paydari Party, and Ali Akbar Nateq-Nouri, another moderate conservative who was once very close to Supreme Leader Ali Khamenei and served as his chief inspector for several years until 2017.
The meeting was called for by Ghalibaf and was held in his office and is generally believed to have been about the outlook of the parliamentary elections and the challenges facing Iran's conservatives. Interestingly, all four men were presidential candidates in different years.
Some Iranian media including the moderate conservative Khabar Online suspect that the meeting was aimed at coming to some sort of arrangement between various conservative groups, in the absence of other political groups including the reformists who have been barred from taking part in elections in Iran at least since 2020.
From among the four, Ali Larijani was the only one who told reporters that the meeting did not have any political agenda. Others remained silent.
The IRGC-linked newspaper Javan opined that the speculations about the meeting are the outcome of Iranian reformists' conspiracies. According to Javan, one of the leaders of the reformists has advised his likeminded politicians that "When your political rivals are moving toward some sort of accord, try to magnify their points of differences. Then, without any intervention just sit there and watch them fight and whenever there is a truce, you try to flare up the dispute.”
In the current round of the Majles, Ghalibaf has managed to garner support for his speakership from among the members of Paydari and the Conservatives Coalition Council, a group directly under the supervision of Haddad Adel who also has some influence in Paydari.
Haddad Adel on the other hand, who has helped Ghalibaf to win his role in the Majles, had pushed Ghalibaf aside in the 2017 Presidential election to pave the way for Raisi's victory, but Raisi lost that election to Hassan Rouhani. Nonetheless, the outcome of Haddad Adel's manoeuvres was creating the hegemony of hardliners in all three branches of the government.
The result for the country was the weakening of the Majles, which lost its supervisory power by being committed to support the hardliner government under any circumstances. Ghalibaf's attempts to stop impeachment motions to change cabinet ministers dramatically reduced the motivation of younger politicians to run for a Majles that no longer has a part in running the affairs of the state, Khabar Online wrote.
Political observers’ take on the issue is that if the next Majles, like the current one, fails to remain independent of the government, this will eventually turn the voters away from any election.
Khabar Online even opined that although there is some sort of tactical alliance between Ghalibaf and Haddad Adel, both relatives of Khamenei, they are unlikely to garner support from Larijani and Nateq-Nouri.
To further undermine the significance of the meeting of the four former presidential candidates, Lawmaker Jalal Mahmoudzadeh told reporters sarcastically that some of those in Raisi's cabinet were also presidential candidates, and you see how they are running the country and what does the country's economy look like under their management.
Dr. Hamid Qarahassanlou (Ghara-Hasanlou), a fifty-four-year-old radiologist, and his wife Farzaneh were arrested in November in Karaj during protests in which a member of the Basij militia, Ruhollah Ajamian (27), was beaten to death by angry protesters but both have denied any involvement in the incident.
Qarahassanlou was initially sentenced to death and his wife to twenty-five years prison, but their sentences were later reduced due to a strong backlash on social media and lack of evidence of their involvement in a second trial.
Yazd and Mashhad, where Hamid and Farzaneh Qarahassanlou will serve their sentences respectively, are nearly 1,000, and 670 kilometers away from their hometown of Karaj.
A statement by the family released on social media Friday, after the announcement of the new sentences Tuesday, said even the footage of the incident made by security agents proves that the couple were not involved in the killing and were only present on the scene on the way home from a protest in Karaj, near Tehran, on November 3.
“He now has to be exiled [to a prison] in Yazd for fifteen years for not having saved the life of that Basiji in the fracas [of the moment] as a humane doctor,” the statement said while describing the very violent arrest of the couple which they say has hugely affected the couple’s teenage daughter.
The large protest rally that turned very violent after security forces attacked protesters was held to commemorate a young girl, Hadis Najafi, who was shot to death by security forces forty days earlier.
“The crime [for which they were punished] was and is nothing other than participating in Hadis Najafi’s 40th day memorial,” the statement said.
Two young protesters, Mohammad Mehdi Karami (22) and Mohammad Hossein (39), were executed over Ajamian’s death in January after a hasty trial which human rights activists have called a travesty of justice.
All of the accused, including Qarahassanlou, were reportedly severely tortured to obtain “confessions” and the hardliner Judiciary assigned lawyers despite several prominent lawyers volunteering to defend them.
The lawyers assigned by the court did very little to defend the accused according to family members.
The convictions were not based on a criminal charge related to the murder per se, but they were charged with ‘moharebeh’, meaning “war against God”, a vague religious concept. The Islamic Republic applies the charge to people who might get into a confrontation with security forces during protests.
The first two hangings triggered strong international condemnations and hundreds of lawmakers in Europe and Australia began sponsoring Iranian detainees in danger of execution to generate publicity and impact their fate.
Twelve other protestors have been jailed for up to 15 years for the Basij agent’s death.
The couple were badly beaten during the arrest and later in detention. Qarahassanlou underwent surgery three times for several broken ribs and damaged lung and the family say he has partially lost his eyesight as a result of the beatings.
The couple who belong to the persecuted Sufi Gonabadi Order were known for active involvement in charitable efforts including building schools for underprivileged children.