Iran, which relies on imports for almost half its refined petroleum products, plans to halt those imports and introduce gasoline rationing later this year, the government announced. The decision appears related to a plan to allow the nation's heavily subsidized gasoline to spike in price in order to reduce the smuggling of fuel to neighboring countries, a practice that aggravates shortages and costs the country billions of dollars every year. . . . Heavy subsidies — which keep gasoline prices as low as 9 cents to 45 cents a gallon, depending on the quality and location — meanwhile allow for huge profits on gasoline smuggled into neighboring countries, such as Afghanistan, Iraq, Pakistan and Turkey. (Washington Times, Monday)
Let's get this straight: The subsidized price is too low, so they're going to create a supply shortage to force it up?
FEE Timely Classic
Prices by Ludwig von Mises