Impact of fuel price increasing policies on fuel smuggling and acceptance of green cars: A case study of Iran

Abstract

This paper investigates a study on the efforts made by Iranian government to carry out the Kyoto protocol obligations (reducing pollution by about 54% by 2030). However, the devaluation of the national currency because of sanctions, prohibition of transactions, and a decrease in oil revenues and derivatives has caused problems in achieving this goal. Hence, on 15 November, 2019, Iranian Government decided to increase the fuel price by about 300% to simultaneously reduce environmental pollution and fuel smuggling. The final results show that smuggling is decreased by about 15%. Also, quotas and increased fuel prices caused daily fuel consumption to decrease significantly from 94 to 74 million litres per day. Despite the reduction in fuel consumption, little change is taking place as most pollution is due to diesel and worn‐out vehicles. The increase in fuel prices increases the producer and consumer price index by 1.54% and 2.62%, respectively. Inflation in consumer prices also reaches 15.92%. However, the currency exchange rate and its impact on import products can shift this to 102.15%. Also, because of the shortage of people's income, domestic automakers’ weaknesses, high tax cost of imported cars, and sanctions, most people prefer compressed natural gas (CNG) and public transportation.

Heterogeneity in the Preferences of Potential Users of Automated Transit Network (ATN)

“…In addition, for people whose car is hybrid, the increase in ATN travel cost will have a higher negative efect on choosing the ATN option compared to those whose car is gasoline by 8%. Since some research conducted both in developed and developing countries indicated that one of the reasons people use hybrid cars is their lower fuel costs compared to gasoline cars and not environmental concerns [58][59][60], and these people are likely more sensitive to the cost compared to gasoline car owners. As a result, this sensitivity has caused the increase in the ATN travel cost to have a more negative efect on them than the owners of gasoline cars.…”