Sunday, January 23, 2011

Gasoline Consumption Down by 5%

The National Iranian Oil Refining and Distribution Company (NIORDC) announced today that the consumption of gasoline in the country during the Iranian calendar month ending 21 January was at 56 million liters. The figure compares to 59 million liters for the same period last year, or a 5% reduction in consumption in the first full month after the start of the subsidy reforms.

The subsidized gasoline price of 100 toumans a liter was replaced by a semi-subsidized price of 400 toumans a liter with a cap of 60 liters per vehicle per month. The disappointing meager reduction in consumption reported by NIORDC is probably because people were still using their old 100-touman allocations until they run out of them, something they are entitled to do. Observers expect the consumption level to go down dramatically when the use of the new semi-subsidized gasoline begins to constitute at least 75% of all consumptions, possibly within the next two months.


WMD said...

Off topic again (you keep changing subjects):

So, what about your "Why can't we all just get along", compromise with the global "mainstream" community and live happily ever after attitude now, mr.U ?!

Anonymous said...

considering Irans consumption exceeded that of a 1. something billion population India !!

5% must be a hell of a lot, like the consumption of half Africa could be fitted in this 5%.

Good work.


Anonymous said...


Anonymous said...

Well done Iran, every little help to be independent.

Anonymous said...

This is a very commendable effort by Iranians and government removal of subsidies was also a good move. Tehran was recently awared the prestigious Urban Transportation Award. This is good move towards sustainable urban planning and quality of life.

Iran's capital city Tehran, with a population 8 million, stands out as a model city in the region for its aggressive policy to expand and implement new mass transit options. The city has developed a comprehensive public transport policy, which is embedded into the city's vision of improving quality of life by having integrated, available, safe, easy, comfortable and clean transportation system, delivered within limited resources.

Despite, the pathetic efforts of Iran's enemies to belittle the achievements of the Islamic Republic, the simple FACT is that Iran has come a long way since 1979 despite all the insidious plots of its enemies.

Nader Uskowi said...

Agreed with the comments on subsidy reforms. This is a very ambitious and courageous initiative by Ahmadinejad. Long overdue. Governments since early 1970s all knew that subsidies at the levels used in Iran were not sustainable, but did not have the stomach to tackle the issue. The country could not sell its oil at high prices and give it away in handouts in the form of subsidies. It becomes a costly entitlement program. Timely move by the government.

The success of any good program is not just in its design but also in its implementation. So far, I believe the government has done a good job. The monthly $40 cash handouts to people to cope with the expected rising prices is working, and with a $100 oil in horizon, the government should not have difficulty to continue the payments for a year or two needed until the effect of the reforms are felt across the board. At the same time the government needs to curb spending in other areas as well, by curbing the growth of its size, in conjunction with the subsidy reforms, to jump start the economy.

Nader Uskowi said...

Dear WMD,

As a matter of policy, I do not engage in any sarcastic conversations. If you have a point to make, please do so in straight fashion and if I had any knowledge of the topic I will comment on it.

But allow me to take this opportunity to thank you for your continued readership as well as active participation in the comment sections. Your comments always enrich the content of this little blog.

Anonymous said...

Nader as you correctly point out, the timing of the subsidy reform was timed quite well as oil and natural resource prices are heading higher and Iran's industrial output and trade is also on an upswing along with Tehran stock market. Ahmadinejad may have his detractors but is not known to shy away from hard decisions. On a personal level he in incorruptible. Iran by global or regional standards is doing very well in terms of economic stability and a strong government. The people sometimes grumble about inflation or economic issues but when they see the economic mess in the US and around the world they realize that things are not that bad.

Iran's plan to save money by significantly cutting subsidies for fuel, electricity and basic food items has had an unexpected response: many Iranians, cushioned from the impact and enjoying relative prosperity, are quietly adjusting to the rising cost of daily living. Iran's forex coffers are full as oil prices rise and its non-oil exports increase. Even Iran's enemies concede that Iran has handled the subsidy removal very astutely:

Iran's handling of the plan could serve as an example for the region, analysts say. Other oil-rich countries in the Middle East that provide generous subsidies, including Saudi Arabia and Persian Gulf petro-Sheikhdoms, also face concerns about balancing the long-term impact on their economies and resources against the threat of political instability.

"Eventually all these countries have to phase out their subsidies. They can take it slowly, but what made it urgent for Iran was fiscal pressure," says Nader Habibi, professor of economy at Brandeis University in Boston.

Anonymous said...

Subsidy reforms will ensure protests like the ones in Lebanon and Egypt and Tunisia, the governments will end, like the Iranian government soon ... It cannot
sustain the burden on poor people any longer, unemployment is increasing, hunger, while Iran is
pumping oil money in unnecessary nuclear weapons, like any country would attack it, what is Iran going to do with a nuclear weapon, use it, defend with it...

it is nonsense, one nuclear weapon, two cannot do anything, it is a backward weapon. Feed your people...

Anonymous said...

@ January 25, 2011 4:17 PM

Is that the best Zionist hasbara line these days?