Iran is facing a growing fuel shortage as the United States restricts the country’s access to imports, tightening the supply of a basic commodity and leaving drivers waiting in long lines at gas stations in Tehran. According to the state-owned newspaper Hamshahri, motorists began filling their tanks before they reached the halfway mark on Sunday due to widespread fears over potential price increases.
Energy Deficit and Economic Pressure in Iran
The national gasoline market is currently experiencing a daily deficit of 14 to 15 million liters. According to Esmaeil Saqab Esfahani, director of the Organization of Optimización Energética y Gestión Estratégica, this shortfall is driven by record demand, damage sustained during the war, and shifts in national budget priorities. “We have had to do something to reduce consumption to national production levels,” Esfahani stated last week, as reported by an Iranian student news agency.
This fuel squeeze comes as the United States intensifies economic pressure. U.S. Treasury Secretary Scott Bessent described this campaign on Monday as “the largest financial offensive ever orchestrated against an adversary.” Gasoline prices remain a highly sensitive issue in Iran. The oil-rich nation relies on state subsidies to provide consumers with some of the cheapest gasoline in the world, but years of inflation and a worsening currency crisis have deeply impacted everyday families.
Did You Know? Previous attempts to raise fuel prices in Iran have triggered deadly unrest, notably in 2019, when hundreds of people were killed by security forces during protests against sudden hikes.
Government Response and Proposed Fuel Management Options
Iranian authorities have warned for months that price adjustments may be unavoidable. U.S. and Israeli strikes against fuel depots and energy infrastructure have worsened long-standing supply imbalances, while a U.S. blockade on ports has cut off the imported fuel Iran typically uses to cover deficits. In response, President Masoud Pezeshkian urged citizens as early as May to use public transportation and consider rationing measures, though those warnings did not prevent the current rush at the pumps.
To cope with the shortfall, the government is encouraging owners of approximately 4,5 million dual-fuel vehicles to switch to compressed natural gas. Additionally, the Persian Gulf Star Refinery—Iran’s largest petroleum processing plant—began using methanol to boost gasoline production, according to state-aligned reports. Energy officials are actively studying three distinct strategies to manage distribution:
- Distributing a fixed total of 121 million liters of fuel daily to gas stations and shutting off pumps once the supply runs out.
- Continuing sales above that daily threshold but at a significantly higher price.
- Allocating specific fuel quotas directly to individuals rather than tying them to vehicles.
Expert Insight: Managing the fuel deficit poses a delicate political and economic balancing act for Tehran. Because previous price hikes ignited deadly nationwide protests, any abrupt shift in pricing or strict rationing risks provoking renewed public outrage amid an already severe currency crisis.
Current Quota System and the Kerman Pilot Test
Iran’s current fuel infrastructure relies on a tiered quota system providing each vehicle with a monthly allotment of discounted gasoline. The initial 60 liters cost 15,000 riales per liter, with the next 50 liters priced at 30,000 riales each, and any volume beyond that costing 50,000 riales per liter.
Last week, the government abruptly halted a pilot program in the southern city of Kerman. That test would have raised total vehicle quotas while charging a much steeper rate of 872,000 riales per liter for purchases exceeding the limit. Officials blamed the program’s cancellation on poor management, but the steep tariff stoked widespread public alarm and fueled concerns that similar price structures would soon roll out nationwide.
Frequently Asked Questions
Why is Iran experiencing a gasoline shortage?
According to official reports, the shortage is driven by record domestic demand, war-related damage to energy infrastructure, and U.S. restrictions blocking key fuel imports.
How large is the current supply deficit?
Energy officials report that the Iranian gasoline market suffers from a daily deficit ranging between 14 and 15 million liters.
What pricing tiers apply to the existing quota system?
Vehicles receive discounted monthly allocations where the first 60 liters cost 15,000 riales per liter, the next 50 liters cost 30,000 riales per liter, and additional liters cost 50,000 riales per liter.
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