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Iran Using Strategic Gasoline Reserves As Consumption Hits Record

Iran International Newsroom
Aug 13, 2023, 20:29 GMT+1Updated: 17:44 GMT+1
Congestion at an Iranian gas station as rumors of imminent rise in gasoline prices have heated up again
Congestion at an Iranian gas station as rumors of imminent rise in gasoline prices have heated up again

In response to a large gap between gasoline production and consumption, Iran has scaled back its distribution and turned to using its strategic reserves.

According to Iran International sources, the Iranian Oil Ministry has taken the step citing the need to curb smuggling. The other option would be to raise prices but the regime is worried that it could trigger protests across the nation.

The National Iranian Oil Refining and Distribution Company (NIORDC), a department within the ministry, has released around 900 million liters of strategic gasoline reserves into the market in an effort to make up the deficit. An informed source disclosed that the country's reserves now stand at approximately 500 million liters, barely enough for more than four days in the event of any production-related disruptions.

The source added that there are challenges for gasoline imports both domestically and internationally, leading to a consistent reduction of gasoline distribution in various regions of the country.

Iranian Oil Minister Javad Owji (right) and National Iranian Oil Refining and Distribution Company Manager Ali-Akbar Nejadali during an event in Tehran  (undated)
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Iranian Oil Minister Javad Owji (right) and National Iranian Oil Refining and Distribution Company Manager Ali-Akbar Nejadali during an event in Tehran

Both Oil Minister Javad Owji and NIORDC Manager Ali-Akbar Nejadali have confirmed the supply restriction. Nejadali explained that in light of increased summer travel and to ensure a steady distribution and prevent station closures, a new measure has been introduced, limiting each refueling session to only 30 to 40 liters.

Iran International reported in late July that the government has postponed tighter fuel rationing implementation due to the approaching anniversary of last year's anti-regime protests in September.

Earlier in the month, NIORDC deputy manager Ali Ziyar said that the average daily consumption of gasoline has hit 124 million liters, indicating a 20-percent increase compared with the previous year. “In recent years, the maximum annual growth in gasoline consumption has been seven percent, but this year we have suddenly experienced a 20 percent increase in consumption,” he said, tacitly acknowledging that a large amount of fuel is being smuggled out of the country. He also stated that the daily gap between production and consumption is 17 million liters.

The government, which controls one of the world's largest oil and gas reserves, sells gasoline at extremely low, subsidized prices, charging less than 10 US cents per gallon, or less than 3 cents per liter, while neighboring oil-producers have much higher prices, in line with international market rates. Second only to Venezuela, Iran has the world’s cheapest gasoline price. The extremely low fuel prices leads to small and large-scale smuggling to neighboring countries.

Back in March, Iran International unveiled a classified document detailing a late February meeting at the presidential office. This document revealed that dangerously low levels of strategic fuel reserves forced major refinery repairs to be postponed to maximize short-term production. Officials were advised to avoid any public statements or suggestions that could be construed as intentions to raise current fuel prices, fearing it might ignite public discontent.

One of the main reasons that the Islamic Republic has not managed to increase prices in the midst of the current economic crisis is because it faced the worst wave of unrest in years since September 2022. A fuel price hike would risk fanning the flames of unrest further. For years there has been talk of adjusting prices, but since 2018 Iran’s currency has dropped 12-fold and any increase needs to be huge to be meaningful in US dollars.

In November 2019, a government decision to increase fuel prices by 50–200 percent triggered a cycle of protests and unrest across the country that lasted for over two weeks. Regime forces killed at least 1,500 civilians, in the worst such crackdown in Iran.

While the country is hugely dependent on the revenues from crude oil exports, due to sanctions and mismanagement, it has failed to modernize the energy sector, with power shortages persisting most of the year. Systemic corruption also further cripples the weak system. The situation has been grave in recent years but since the administration of Ebrahim Raisi assumed office in 2021, the entire energy management system is going haywire, drawing backlash from not only the public but even regime insiders.

In recent days, rumors of an impending gasoline price increase have once again ignited, prompting a rush of people to gas stations.

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Casualties Reported In 'Terrorist Attack' In Southern Iran

Aug 13, 2023, 17:46 GMT+1

Iranian state media have reported a terrorist attack on Sunday at a religious shrine in Shiraz, southern Iran, resulting in multiple deaths and injuries.

According to government media reports, two gunmen attempted to enter the premises of Shahcheragh, which was the site of another shooting incident last year. However, they were met with resistance from security guards.

Subsequently, the gunmen unleashed a shooting spree that claimed the lives of at least two guards and two visitors, while also causing injuries to several others, IRNA reported. Different Iranian media outlets have presented conflicting figures regarding the number of casualties.

As of now, one of the shooters has been apprehended, while the other perpetrator remains at large, Fars news reported without any information about their identity.

The aftermath of the attack on Shahcheragh funerary monument and mosque in Shiraz on August 13, 2023
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The aftermath of the attack on Shahcheragh funerary monument and mosque in Shiraz on August 13, 2023

In July, Iran publicly hanged two Afghan men who were accused of involvement in an attack on Shahcheragh last October, resulting in 15 deaths and 20 injuries.

The lone gunman, armed with an assault rifle, entered the shrine and opened fire, and was subsequently shot and wounded. The government reported he died in hospital, identifying him as a Tajikistan citizen. The two men who were hanged on July 8 were alleged to have directly participated in the "arming, procurement, logistics, and guidance of the main perpetrator" of the terrorist attack.

The October attack on Shahcheragh coincided with anti-regime protests in Iran. This prompted speculation and accusations that the government orchestrated the attack as a diversion from the protests and as a pretext for further crackdown.

In a perplexing turn of events, the Islamic State group claimed responsibility for the attack, which fit the government narrative of Iran being under attack by extremists.

Israeli Strikes Target Iran-Backed Militia Missile Depots in Syria

Aug 13, 2023, 17:16 GMT+1

Strikes on Sunday attributed to Israel have targeted missile stockpiles of Iran-backed militias east of Syria's capital Damascus.

Residents of the region reported repeated blasts which came from "the warehouses of pro-Iran militias" in a mountainous area east of the capital, said the Britain-based Syrian Observatory for Human Rights, which has a wide network of sources inside Syria.

The head of the war monitor, Rami Abdel Rahman, said they do not know if the blasts were from an airstrike or ground operation, adding that it was still unclear if anyone was wounded or killed in the explosion. 

Israel has been attacking what it has described as Iran-linked targets in Syria since 2017, to prevent Islamic Republic forces getting entrenched near its northern borders and weapons reaching the Lebanese Hezbollah.

The most recent reported Israeli strike was on August 7, when weapons and munitions warehouses and positions of Iran-backed militias around Damascus were targeted. At least four Syrian army soldiers were killed in the attack.

Iran intervened in the Syrian civil war in 2011 to save Bashar al-Assad’s regime, which had close ties with Tehran and allowed weapons and assistance to flow to Hezbollah in Lebanon. With crucial Iranian and Russian military assistance Assad has regained most of the territories lost to the rebels but remains highly dependent on Moscow and Tehran.

Iran says its officers serve in an advisory role in Syria at the invitation of Damascus. Hundreds of Iranian forces and thousands of proxy militiamen including senior officers have been killed in Syria during the war.

Iran Is Unwell, Says Conservative Newspaper

Aug 13, 2023, 15:26 GMT+1
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Iran International Newsroom

Not only is Iran's economic situation critical, but it is also ailing in terms of politics, culture, and ethics, a leading conservative newspaper stated in an editorial.

Pointing to "various forms of corruption in the government's management system," the Jomhuriye Eslami (Islamic Republic) daily recommended that government officials heed well-wishers and refrain from attributing "all of the country's problems to the enemies."

The newspaper accused government officials of isolating themselves within a bubble, entangled in illusions detached from societal realities. The daily also recommended that officials break free from this isolating bubble to reengage with the broader society.

Jomhouri Eslami stated that President Ebrahim Raisi's mandate aimed to rectify the corruption and deviations from principles during the populist government of former President Mahmoud Ahmadinejad (2005-2013). However, not only has this objective gone unmet, but the public also learns of fresh corruption cases within the government on a daily basis.

A political graffiti in the Iranian city of Esfahan (Isfahan) that is roughly translated as “Poverty, corruption, high prices; we continue protests until the collapse of the regime”
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A political graffiti in the Iranian city of Esfahan (Isfahan) that is roughly translated as “Poverty, corruption, high prices; we continue protests until the collapse of the regime”

The conservative publication argued that given the prevailing circumstances, certain individuals become entangled in financial corruption due to their struggle to meet basic needs. Conversely, others succumb to political, cultural, and ethical deviations due to their excessive wealth.

However, the paper did not underscore the fact that the opaque political system, built upon loyalty to the regime, allows officials to engage in corruption and amass personal wealth.

It subsequently cited the recent "sex scandals involving certain prominent cultural officials in the country" and the "involvement of other officials in bribery, embezzlement, and money laundering," asserting that these incidents signify the nation's deteriorating state. The publication added that "last year, around 120 officials were apprehended for financial corruption, and halfway through this year, the tally has already reached 144."

In July, there was widespread outrage among Iranians as successive videos surfaced, revealing officials responsible for upholding moral standards and religious norms engaging in same-sex activities, a grave violation under Sharia law.

The daily further stated that these figures are alarming for a government that claims to be Islamic.

Meanwhile, Mostafa Derayati, a leading member of the reformist Unity of Nation Party told Rouydad24 website that "The government has ostracized the country's most capable officials and has handed over the affairs of the state to inefficient individuals."

Reformist politician Mostafa Derayati  (undated)
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Reformist politician Mostafa Derayati

Adding that the current presidential administration is filled with inefficient officials, Derayati argued that capable figures were pushed into isolation when the hardliner Guardian Council disqualified tens of moderate and reformist candidates in the 2020 parliamentary and the 2021 presidential elections.

"It was evident that the governance of the nation was transitioning to a group of individuals lacking analytical acumen and the capacity to address the country's challenges," he remarked.

Derayati, a reformist member of the Islamic Studies Center, reiterated that today, even those who supported President Ebrahim Raisi in the 2021 elections are criticizing him. "In fact, the Raisi administration's performance has been so full of mistakes during the past two years that it is really hard to defend his government." He added, "We have handed over the affairs of the state to a government whose president has no executive experience. It was clear from the very beginning that he knew very little about management."

Another critic, lawmaker Ahmad Alirezabeigi, asserted that the statements made by Raisi's aides indicate either a lack of a comprehensive strategy for governing the state or, even if such a strategy exists, they lack the financial resources required to implement their envisioned objectives.

Iran Claims Oil Exports Higher Than Gov’t Target

Aug 13, 2023, 13:16 GMT+1

Iran's oil exports have surpassed the government's 1.4 million barrels per day target, the head of Iran's Plan and Budget Organization said on Sunday.

"Based on Iran's current budget, the government aims at exporting 1.4 million oil barrels per day, an objective which has now been surpassed thanks to the Oil Ministry's efforts," Davoud Manzour said.

The administration of Ebrahim Raisi based the budget of the current Iranian year (started March 22) on 1.4 million barrels of oil exports per day, however, the government expected to sell each barrel for $85. This would mean more than $43 billion in oil revenues from March 2023 to March 2024.

Iran’s heavy crude is worth about $80 on paper but the regime sells its oil clandestinely mostly to China with hefty discounts, to range from $40 to $50 a barrel, including payments to middlemen facilitating the illicit shipments.

Iran International reported in December that Tehran provides huge discounts to China, charging as little as $37 per barrel. A report by The Wall Street Journal in July said Iran is exporting the highest amount of crude oil in five years, but it offers discounts of up to $30 per barrel.

Prior to the re-imposition of US sanctions in 2018, Iranian oil exports were about 2.8 million barrels per day.

Iran's crude exports declined from 2 million to 200,000 barrels per day after the United States began imposing sanctions in 2018. Shipments began to increase in late 2020 when it became clear that President Joe Biden wanted to revive the JCPOA nuclear agreement with Iran abandoned by his predecessor. Critics have accused his administration of not enforcing the sanctions and allowing China to buy around one million barrels per day from Iran.

Tehran City Council Fed Up With Mayor’s Nepotism

Aug 13, 2023, 11:37 GMT+1

The Tehran City Council has grown weary of repeated interference in decision-making processes by the mayor's son-in-law, who holds no official position.

Ali-Asghar Ghaemi, a member of the Tehran City Islamic Council, stated on Sunday that an official warning has been drafted and signed by nine council members to address the issue, and it will soon be presented to the council's executive board.

The Islamic City Council of Tehran oversees the governance of the city, including the election of the mayor and the allocation of budgets for the Municipality of Tehran. Its 21 members are elected through a plurality-at-large voting system for four-year terms.

Ghaemi noted, "The interventions by [Mayor Alireza] Zakani's son-in-law in various entities and subsidiary public companies of Tehran Municipality have reached a point where even the authority to make seemingly simple decisions has been stripped away from the managers."

Alireza Zakani, the hardliner mayor of Tehran, had appointed his son-in-law, Hossein Haydari, as his advisor, while Haydari concurrently served as the head of the board of directors for a holding company responsible for the information technology of Shahr Bank (City Bank). Additionally, Haydari and Zakani’s daughter hold managerial roles in several other IT companies working with Iran's phone and internet service providers.

In response to public outcry over the mayor's nepotism, Zakani initially said that Haydari was intended to work for free, and later announced that he had rescinded Haydari's advisory position.

"The decision to revoke the advisory role for Zakani's son-in-law was commendable; nevertheless, it was expected that this action would be put into practice," Ghaemi added.