| @btroup1: Yes, Iran does in fact import much of its gasoline, but the government heavily subsidizes the cost to the consumer. In fact, there are only two things that cause the price of fuel to differ between locations: transportation and government.
The market for fuels is global in scale. Regardless of what it costs to extract and refine the oil, the price that a refiner can get for the fuel is fixed by the world market price. The refiner can tack on more for transportation costs, but that is about the only thing extra its going to get from the buyer.
When you adjust for transportation costs, the only thing that's left to explain the differences in price is government. Most governments tax motor fuel, but a few; like Iran, Venezuela, Saudi Arabia, etc.; heavily subsidize it. The fact that these countries have a lot of oil is only indirectly the cause of why they have such cheap gasoline. It's indirect because the only reason they subsidize the price of gasoline is that their citizens believe it is their birthrights to have cheap gasoline. If these governments tried to end the subsidies, there would be the kind of unrest in the country that not even a stolen election could generate. |
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