Iran continues to offer one of the cheapest petrol prices in the world despite regional tensions and global uncertainty. Through its heavy government subsidy system, Iran sells petrol at around PKR 6 per litre (approximately 0.029 USD) for most citizens.
This extremely low price is possible because Iran is a major oil-producing country. The government heavily subsidises fuel to keep living costs low for its people. Even after recent adjustments, drivers can buy a certain quota of petrol at the highly subsidised rate of about 15,000 Iranian Rials per litre.
For comparison, petrol in Pakistan currently costs over Rs 400 per litre. In many other countries, the price is much higher. Iran’s policy makes fuel cheaper than bottled water in some cases, but it puts a huge burden on the national budget. The subsidies cost the government billions of dollars every year.
Experts say that while the cheap fuel benefits ordinary Iranians, it also leads to high consumption, smuggling to neighbouring countries, and environmental problems. The government has introduced quota systems to control overuse, with higher fuel prices used beyond the monthly limit.
Even during the recent regional conflicts, Iran has managed to keep domestic petrol prices very low for its citizens. This policy remains popular among the public but continues to be a major challenge for Iran’s economy.
