Iran Launches Three-Tier Gasoline Pricing as Economic Pressures and Energy Imbalances Mount
As of Saturday, December 13, 2025, Iran officially began implementing a three-tier gasoline pricing system, marking one of the most sensitive fuel policy changes since the nationwide protests in 2019.
As of Saturday, December 13, 2025, Iran officially began implementing a three-tier gasoline pricing system, marking one of the most sensitive fuel policy changes since the nationwide protests triggered by a sudden price hike in November 2019. Under the new system, gasoline is now sold at 1,500, 3,000, and 5,000 tomans per liter, with the highest rate applying immediately to fuel purchased through emergency cards at gas stations, which rose from 3,000 to 5,000 tomans per liter.
The rollout was confirmed by Fereydoon Yasemi, head of Tehran’s National Iranian Oil Products Distribution Company, and by government spokesperson Fatemeh Mohajerani, who said the policy aims to manage fuel consumption and reduce Iran’s growing dependence on gasoline imports. Mohajerani announced that subsidized quotas have been eliminated for government vehicles (except ambulances), imported cars, and vehicles registered in free-trade zones, while ordinary private car owners retain access to subsidized fuel within a monthly limit.
Under the new framework, every eligible driver continues to receive 60 liters of gasoline at 1,500 tomans per month. An additional 100 liters can be purchased at 3,000 tomans per liter, bringing the total subsidized and semi-subsidized quota to 160 liters per month. Any consumption beyond that threshold, as well as all fuel purchased using station emergency cards, is priced at 5,000 tomans per liter. According to the government, around 80 percent of motorists meet their monthly needs within this 160-liter ceiling.
President Masoud Pezeshkian has framed the policy as a matter of economic necessity rather than choice. He has repeatedly pointed out that Iran currently imports gasoline at an estimated cost of around 60,000 tomans per liter, while selling it domestically at heavily subsidized prices. “The foreign currency used to import gasoline belongs to everyone who lives in this country, not only to those who benefit from burning cheap fuel,” Pezeshkian said recently, adding that the state lacks sufficient financial resources to simultaneously subsidize fuel and address the livelihoods of the majority who do not own cars.
According to official figures published by the Iranian government, approximately $6 billion per year is currently spent on gasoline imports, a sum equivalent to one and a half times Iran’s annual cash subsidy program. Mohajerani noted that while Iran exported fuel products worth more than $6 billion in 2019 and 2020, it now imports over $4 billion in gasoline annually, a figure that continues to rise. Members of parliament have warned that domestic refineries are expected to produce no more than 107 million liters per day this year, while average daily consumption has exceeded 127 million liters, forcing Iran to import at least 20 million liters per day at a cost of roughly $4 billion.
The policy is being introduced amid broader fiscal stress. Government officials estimate that Iran’s budget deficit exceeds 50 percent of total public spending, and the economy is already under pressure from inflation, currency depreciation, and the lingering effects of the 12-day war earlier this year, which heightened concerns about energy security. Pezeshkian has emphasized that the current measures generate no immediate windfall for the government, noting that applying the 5,000-toman rate to select categories of vehicles is only a first step in managing consumption rather than a direct revenue-raising move.
At the same time, authorities have left the door open to future adjustments. The government has stated that the 5,000-toman rate is not fixed and may increase in coming months depending on economic conditions. Imported super gasoline, already offered on Iran’s Energy Exchange earlier this fall at a base price of around 65,800 tomans per liter, is expected to reach consumers at prices approaching 75,000 tomans, effectively creating a fourth price tier in practice.
The new system also introduces complex rules that have drawn criticism. Each household is eligible for subsidized fuel for only one vehicle, with owners required to designate which car receives the quota. Newly manufactured vehicles, high-value domestic cars, foreign vehicles, and free-zone plates are largely excluded from subsidies. Internet-based ride-hailing drivers, estimated at around two million nationwide, receive no special quota beyond the standard 160 liters, though the government has promised to reimburse part of the price difference for higher-tier fuel used for work purposes through a separate system.
Supporters of the policy argue that gradual, tiered pricing is preferable to a sudden price shock, helping to curb excessive consumption, reduce pollution, and make fuel smuggling less profitable without provoking immediate social unrest. The government has estimated that the impact on inflation will be limited—around 0.2 percentage points—and that additional revenue, estimated at 3–5 trillion tomans annually, will be directed toward support for lower-income households.
Critics, however, warn that even modest fuel price increases can have outsized effects on transportation costs, informal employment, and the price of goods and services, particularly at a time when household purchasing power has already been eroded. Since November 2019, the exchange rate has increased nearly tenfold and average consumer prices have risen by almost 700 percent, fueling skepticism about official inflation estimates. Some lawmakers note that nearly 30 percent of vehicle owners rely on their cars as a primary source of income, making fuel costs a direct livelihood issue.
Gasoline remains a uniquely sensitive issue in Iran—one that sits at the intersection of economics, politics, and social stability. Past attempts at reform in 2007 and especially November 2019 demonstrated how quickly fuel pricing can become a trigger for unrest. For this reason, successive governments avoided meaningful reform despite acknowledging that gasoline prices were economically unsustainable.
The Pezeshkian administration argues that the timing reflects economic compulsion rather than political convenience. With rising consumption, mounting import bills, and an expanding budget deficit, officials insist that continuing to sell gasoline far below cost is no longer viable. Whether the three-tier system succeeds in reducing consumption, imports, smuggling, or fiscal pressure remains uncertain. What is clear is that Iran’s gasoline problem—like its broader energy crisis—is no longer a question of resources, but of governance, trust, and the social cost of reform.