Iran to reduce monthly gasoline quota

Iran plans to reduce the monthly quota of subsidized gasoline for private motorists by 20 percent in the coming winter, a senior official says.

"The gasoline quota of private motorists has been set at 80 liters per month beginning from the month of Dey (December 22, 2009)," said Ali Rabiee, a deputy head of Iran's fuel management organization.

In the beginning of the current Iranian year (March 2009), Iran reduced the quota of private motorists from 120 liters per month to the current 100 liters.

According to Iran's budget bill, the gasoline produced domestically must be sold at the price of 1,000 rials (10 cents) per litter while imported gasoline must be offered to motorists at a price of 4,000 rials.

Iran only produces 60 percent of its domestic gasoline demand and imports the remaining 40 percent.

The new measure is expected to cut consumption as Iran is facing fresh US sanctions which ban companies selling gasoline to OPEC's second-largest oil producer.

Iran says the sanctions would be ineffective as Tehran plans to increase its gasoline production by constructing new refineries and modernizing existing ones.

Earlier this month, Iran's parliament approved a subsidy reform plan that would cut energy subsides and bring prices closer to international markets.

Under the bill, which needs approval from the legislative watchdog, the Guardian Council, subsidies on energy carriers such as gasoline, gas and electricity will be cut and a portion of the recovered revenue will be distributed among lower income citizens.