Finally a bill banning gasoline sales to Iran was ratified in the US Congress. Apparently this Ratification (possibly after approval in the US Senate) enables the President to impose a series of sanctions against companies which sell gasoline to Iran or cooperate with them in increasing local gasoline production.  

Banning sales of gasoline to Iran is not a new idea and has been on the US Congress agenda since Bush presidency. But the bill was not ratified during the time. In that period, Iran was practicing its national fuel card distribution, to control the consumption by rationing the gasoline, and there was a discussion among American politicians and decision makers to see if imposing such sanctions is in practice in

favor of Iran’s government or exerts pressure on it. Some believed that Iran may welcome it and because of which not only enforces the rationing more comfortably and justifiably but also declares its execution unavoidable.  

Moreover, by stating that the Americans are the cause of such sanctions and limitations they can lead the public opinion more against the U.S. Some others believed that such measures will incite public opinion against the Iranian government and people hold them responsible for foreign countries’ pressures due to their adopted foreign policy and this in turn leads to strong divergences between the Iranian government and the nation. In any case there was not a consensus among decision makers on this issue then and probably this was the main reason why this sanctions draft was not finally ratified.  

Since then, there have been many changes in Iran. Fuel card system and rationing has been enforced to the full and the consequences of which are known. In spite of all these efforts still about 40% of gasoline consumption is imported. Although, in practice, this figure will be more than %40 since the local gasoline production quality is low and needs to be blended with imported gasoline with higher octane to be merchandisable.  

Furthermore, in spite of budget laws limitations, regarding the quantity of imported gasoline, the government has imported gasoline in quantities more than the allowed quota limit in the ratified budget in the past two years and more than the quantity that the Iranian parliament member find permissible. This, in practice, indicates the government sensitivity to gasoline issue in Iran and the role it plays in its social acceptability.

Also, after the tenth presidential election and the following events and developments, the prevailing political conditions have changed and the sensitivities have increased and possibly these have been the driving forces that paved the way for the recent ratification of gasoline sanctions against Iran by the US Congress.  

Gasoline and many other goods are imported into Iran. Gas oil shortage is seasonal and temporary and occurs only in peak consumption periods and also depends on climate conditions. But gasoline is a product which all people directly and permanently need it, its shortage is continuous and the potentials for gasoline import and storing are limited.  

Absence of proper public transportation and worsening limitations like old air fleet increases the community dependence on gasoline and its shortage will quickly have adverse consequences.  

In fact there is a relationship between passing gasoline sanctions plan and the new US policy towards Iran. When somebody wants to enter into a negotiation and to have an upper hand in the dialogues, naturally they take the best preparatory measures to make the most of it. Some Western authorities believe that oil and gas earnings, especially with their relative high global prices, financially help the undesired countries and in fact strengthen them.  

Iran’s oil industry as the main source of income for the country is now facing many problems. Internal conditions and international problems make the advancement of the big projects impossible. Due to the vast numbers of people involved in the country’s oil industry, normally on time procurement of sufficient quantity of gasoline, which is of importance to the whole society, will cost oil industry’s management a lot of time and energy.

This is due to the fact that only a very capable management network under circumstances can tackle day to day problems of such a sensitive product and at the same time follow up and lead the major infrastructural upstream projects and also maintain and increase the crude oil production level. Therefore, tackling gasoline supply problems in line with the above mentioned problems will slow down the development of major production projects and in the mid-term will endanger the country’s oil income.

For example it has been stated that an emergency plan was adopted in petrochemical industry which enables the change in the production lines of some petrochemical complexes, turning them into gasoline production units in case of emergency. Probably there are some more strategic plans in place or under consideration. Such efforts will rob away a part of time and energy of the industry and its management.  

This issue, however, could be looked at from another angle. In view of current prevailing global economic recession there is an oversupply of gasoline in global oil markets and will be more by the end of summer. Summer is the driving season and road trips, especially in the U.S. as the biggest gasoline consumer in the world. At the same time when monsoon season starts it may interrupt the operation of oil installations which in turn results in more demand for storing crude oil and petroleum products. Therefore, by the end of summer the demand for gasoline will diminish and as pointed out above the market will face oversupply of gasoline.  

Such conditions may discourage some gasoline suppliers from losing a big and key market such as Iran and hence to maintain their profits, they may not completely follow US sanctions requirements and instead sell gasoline to Iran through brokers. The chances are that Iran will be able to import the needed gasoline but naturally under such sanctions and limitations and also buying through third parties will incur Iran extra costs which will be %30 to %40 more according to some experts’ forecasts.

The increase in Iran’s currency costs for gasoline import may be one of the convincing reasons for the U.S congress to ratify such a sanctions plan. Today especially with regard to gasoline, we are witnessing the fact that carelessness in energy consumption in times can turn into a threat to our national security. Therefore, management and controlling the energy consumption issue not only has economic and environmental dimensions but also political and security consequences.

Gasoline rationing experience along with increasing selling price and dual pricing mechanism has taught us a good lesson and made it clear that using pricing tool alone is not sufficient to settle the issue and the final solution will be in correcting transportation and gasoline consumption models and meeting international standards in fuel consumption efficiency in vehicles and also adopting other major measures.

In fact, correcting the consumption model in the country should not be limited to gasoline only. Today gasoline has the potential to turn into a threat and if this trend continues, in addition to gasoline, other sources of energy or petroleum products may turn into potential threats as well.  

This is a subject which will definitely not be overlooked by Iran’s decision maker in the field of energy.