Three-tiered diesel prices

The Cabinet, in a recently announced resolution, has approved the supply of diesel fuel at three rates: quota-based, semi-subsidized, and free market. This policy is designed to manage fuel consumption, reduce smuggling, and reform the energy subsidy system. The quota-based rate has been retained to support sectors such as public transportation and agriculture, while the semi-subsidized rate serves as an intermediate option, and the free market rate applies to excess consumption or usage beyond allocated quotas.

Veyskarmi, CEO of the National Iranian Oil Products Distribution Company, stated, “According to the Cabinet’s approved directive, diesel quotas will be allocated based on travel routes starting from early July.” He added, “However, diesel vehicles lacking valid cargo documentation or seeking fuel beyond their quota must use the second or third rates.”

He further explained: “The first rate remains 300 tomans for the active fleet with specified quotas. The second rate is half the purchase price of diesel from refineries, applicable up to 40% above the quota limit. The third rate is based on the purchase price of gas oil from refineries. Both the semi-subsidized (second) and free market (third) rates will be updated every three months.”

Key outcomes of this new policy include targeted support for strategic sectors, reduced subsidy misallocation, enhanced fuel market transparency, and flexible pricing mechanisms.