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(Masood Mortazavi)

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Tuesday August 17, 2004

[ Economics ] Oil prices at the pump (in Iran)

Gas pump on the Isfahan-Saveh road. July 2004.

The price, listed on this gasoline pump, is in Iranian Rials. In July 2004, when this picture was taken on the road from Isfahan to Saveh, 8600 Rials could be exchanged for about $1. The total price, seen in this picture, is for 5.07 liters. That's about 1 + 1/4 of gals for less than 50 cents.

As you can see, in Iran gasoline is priced sharply under the world markets. The social and economic reasons are subtle. In very brief terms, this is primarily a way for the government to subsidize the national economy. Other oil derivatives which require higher-level processing are traded at world market prices and are normally produced by companies listed on the Tehran Stock Exchange.

2004-08-17 02:46:56.0 -- Comments [3] ; Permalink ; Trackback.

Comments:

That's nothing... In Venezuela unleaded gasoline (the most expensive of the two) costs Bs. 97 per liter which translates into US$ 0.20 a gallon

It's cheaper than a 2-liter bottle of Coca-Cola or even water!

Posted by Oscar De Le� on August 17, 2004 at 03:41 PM PDT #

Similarly, in Kyrgyzstan (a central asian republic west of China), gasoline prices remained relatively constant, at about $1.15 per gallon, from December 2003 through July 2004, despite a significant rise in crude oil prices worldwide and gasoline prices in the U.S.

Posted by Mark on August 18, 2004 at 07:38 AM PDT #

Yes, also in Iran, it is less expensive than a liter of bottled water, which goes for 4000 to 8000 Rials, depending on where you buy it. So, gasoline costs 1/5 to 1/10 of water. So, it is coming at great subsidy to the economy.

Posted by M. Mortazavi on August 18, 2004 at 07:07 PM PDT #

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