Iranian regulators recently authorized a 41% hike in prices for gasoline and diesel automotive engine oils. The country’s Consumer and Producer Protection Organization signed off on the increases – the second such markups in nine months – partly to acknowledge cost increases absorbed by producers but also to combat dwindling domestic supply.
Several Iranian news organizations reported that lubricant marketers boosted engine oil prices the past week after the CPPO authorized the moves.
Finished lubricant prices have risen across much of the world in recent months due to steep run-ups in costs, including prices for base stocks, which are in short supply. In Iran the government controls prices for fuel and other petroleum products.
Some news reports suggested that consumers would bristle at the large hikes, but government and business officials contended that they will benefit consumers by motivating suppliers to make more product available domestically.
“We expect the distribution of motor oil, which had decreased in the market since the beginning of this year, to be widely distributed again by the manufacturers’ companies without any restrictions, with a 41% increase in the price of motor oil,” Tehran Rubber, Oil and Window Sellers Union President Davood Saadatinejad said, according to an article in Mosalas Online.
Several other sources also cited a decline in engine oil distribution as an argument in favor of the hikes. However, an official with the Iranian Oil Refiners Association, Mehran Heidari said suppliers began cutting back on distribution recently because they anticipated the price increases and wanted to take advantage of them, according to another article in Mosalas this week.
Others said suppliers had been shifting sales from the domestic market to export because the latter offered better prices.
On Sunday police in the western city of Ilam arrested several suspects accused of hoarding nearly 9,000 liters of engine oil.
Prices for gasoline and diesel engine oils rose 41% and 53%, respectively, in November.