Iran's gasoline shortage worsens amid sanctions and public distrust

Only days after Washington announced a new round of economic sanctions on Iran, the country's gasoline shortage has become increasingly visible on the streets.

In cities across Iran, drivers are reporting hours-long waits at filling stations. Videos circulating on social media show some people arriving before midnight or sleeping in their cars to secure fuel the following morning. Some stations have closed before serving everyone in line.

The situation is even more difficult for diesel. Truck drivers say queues at filling stations near major cities can stretch for kilometers, forcing them to wait overnight simply to obtain enough fuel to return to work.

Iran already faces a gasoline deficit of roughly 15 million liters a day. War damage, difficulties importing refined products and a tightening US blockade have made an old structural problem much harder to manage.

Hours in line for a few liters

A resident of Karaj, west of Tehran, told DW that some filling stations were limiting individual purchases to around five liters.

"I'm in the gasoline line right now. It took about 45 minutes just to get this far," he said. "Yesterday I went to several stations. Some were closed, some had no gasoline and others had very long queues."

He said he returned at 6 a.m. the next morning hoping to avoid the crowds but again found a long line.

He suspects the shortages are partly being used to prepare public opinion for higher gasoline prices, a claim that cannot be independently verified.

For truck drivers, waiting means losing income.

"Our whole life is either spent in the diesel line or on the road," one driver said. He described sleeping at a station while waiting for a tanker that might arrive around midday and supply only a few dozen trucks.

Another driver said he had been waiting since 8 a.m. after failing to obtain diesel the previous day.

For drivers whose earnings depend directly on keeping their vehicles moving, every lost day adds to rising insurance, tire, oil, repair and maintenance costs.

Is Iran changing its gasoline?

The shortage has coincided with the use of methanol in domestically produced gasoline.

Vahid Ghaneifard, chief executive of Persian Gulf Star Oil Company, recently confirmed that the refinery had begun testing methanol as an oxygenate in its gasoline.

The company says methanol makes up around 0.5% of the mixture. Iran's refining authorities say the national fuel standard permits methanol concentrations of up to 3%.

Officials insist the trial complies with technical requirements.

But the timing has fueled public suspicion.

Videos shared online show motorists holding bottles of unusually clear fuel and claiming that gasoline quality has deteriorated.

Some have alleged that water or excessive alcohol is being mixed into supplies. The allegations have not been independently corroborated.

There has, however, been at least one confirmed incident involving water contamination. In Rafsanjan, local authorities acknowledged that water had mixed with gasoline at a filling station after videos showed cars and motorcycles experiencing problems following refueling.

Officials said the incident resulted from a technical fault and was being investigated.

Distrust over fuel quality grows

For motorists already facing shortages, isolated incidents can reinforce wider fears.

A Tehran resident told DW he had spent about 1 billion tomans — roughly $5,250 (€4,529) at current exchange rates — repairing his car after its crankshaft failed. He believes poor-quality gasoline caused the damage, though such a connection has not been independently established.

He said he was reluctant to publicly protest.

Another resident in Rey, south of Tehran, told DW that motorists had gathered outside a filling station after several cars were allegedly damaged following refueling.

The concern is not simply technical, as it reflects a deeper collapse of trust between consumers and authorities at a time when the government is also discussing higher gasoline and diesel prices.

Tehran argues that the current subsidy system encourages excessive consumption and smuggling and imposes an unsustainable burden on state finances.

But consumers point to other issues such as inefficient cars, inadequate public transport and incomes that have failed to keep pace with inflation.

Is a price increase in the works?

Economist Hassan Mansour believes the government is once again preparing the political ground for higher energy prices.

Officials have repeatedly argued that Iranian gasoline prices are artificially low, that large volumes are smuggled abroad and that the economy consumes far more energy per unit of output than comparable countries.

The proposed solution is to bring domestic fuel prices closer to international levels.

"Once again, the government finds itself preparing the ground for raising the price of energy carriers," Mansour told DW.

But the problem runs deeper than subsidized gasoline.

Mansour points to the financial condition of Iran's oil industry. Budget documents indicate that the National Iranian Oil Company has tens of billions of euros in debt to the central bank and commercial banks, while the company also owes substantial sums to the National Development Fund and faces major tax liabilities.

When these debts cannot realistically be repaid, Mansour argues, they weaken state finances and contribute indirectly to currency instability and inflation.

Raising gasoline prices could therefore serve both as a demand-management measure and a source of additional revenue.

A politically dangerous choice

The government has few easy options.

While imports are harder to finance and transport, domestic production is struggling to keep pace with consumption.

Increasing output quickly requires investment and technology, while reducing consumption means either rationing fuel more aggressively or raising prices. Yet both carry political risks.

Iranian authorities remember what happened in November 2019, when a sudden gasoline price increase triggered nationwide protests followed by a deadly crackdown and an internet shutdown.

Today the economic environment is considerably more fragile.

War has damaged infrastructure, international sanctions are tightening and household purchasing power has fallen sharply. Long fuel queues are now adding another source of frustration.

For Tehran, raising prices might help reduce the gasoline deficit.

But doing so while people are already waiting overnight for fuel could turn an energy shortage into another crisis of public anger, which is something far more difficult to control.

Edited by: Srinivas Mazumdaru