Iran Exports Gasoline For As Low As An Incredible 2 Cents A Liter

Figures released by the Customs Organization show that last year Iran exported gasoline at an average price of 38 cents per liter, lower than even crude oil.

Speaking to Shargh newspaper, Spokesman of the Customs Organization Ruhollah Latifi said Iran's daily gasoline exports averaged 5.3 million liters in the previous Iranian calendar year. Annual revenues from selling gasoline amounted to $732.6 million, around 38 cents per liter, he said, referring to the Iranian calendar year which ended on March 20.

In 2021, according to OPEC figures, crude oil sold for around $78 per barrel which puts the price of one liter of crude at around 49 cents, higher than the price of gasoline, Shargh's Maryam Shokrani wrote.

Latifi told Shargh that nearly half of all gasoline exports -- at around 39 cents and a total of $244.6 million -- were made in the last month of the year (February 20 to March 20). These figures show that despite the spike in international prices of crude oil and gasoline in March, Iran's gasoline sold at the same rate as before.

Mostafa Nakhaei, spokesman of the parliament's energy committee also told Shargh that the parliament had received reports that in the one-year period from March 21, 2020, gasoline had sometimes been exported at prices as low as 5,000 rials, one-third of its subsidized domestic price – an incredible two US cents per liter or around 10 cents a gallon. ($1=280,000 rials)

Why so cheap?

Bulk gasoline prices in the Persian Gulf region were above 80 cents a liter in this period.

Unlike crude oil, gasoline exports are not sanctioned by the United States, and it is not clear why Iran sold the refined product so much cheaper than international prices.

One explanation can be the desperate need for cash dollars as international banking transfers are out of question amid American banking sanctions. It could also be due to shadowy middlemen and networks handling most of Iran’s fuel exports who take substantial cuts and reduce government revenues. Some of these middlemen are people well connected with top officials, as previous scandals from early 2010s revealed.

As the news emerged on Wednesday some Iranians began commenting on social media that in 2019 the government suppressed protests to a hike in fuel prices by killing hundreds of people while it is ready to export gasoline at two cents a liter.

Nakhaei said that some lawmakers have demanded a probe into the export of gasoline at such low prices and the loss the oil and refinery industries have incurred because of that. "Apparently the government only endeavored to raise the gasoline export figures at any cost," he said.

More oil exports with no visible impact

Officials of the government of President Ebrahim Raisi have repeatedly boasted that they have succeeded in raising oil exports by as much as 40 percent despite sanctions imposed by the US in 2018 when Donald Trump pulled the US out of the 2015 nuclear deal with Iran. They also claim that they are now even fully repatriating the revenues from oil sales.

Many Iranians ask why they can see no change in economic indices despite increased oil exports and repatriation of revenues as the government claims, especially with very high fuel prices since the invasion of Ukraine.

An informed source in oil ministry on Tuesday told the government mouthpiece, Iran newspaper, that the reason for not being able to experience any prompt effect of the money coming into government coffers from oil sales was that it takes 90 days to receive the payments from buyers.

But the government claim about higher oil exports goes back to all of 2021, not just the last three months.