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Iran grapples with unintended consequences of ultra-cheap petrol

Authorities under pressure to remove expensive subsidies that keep fuel prices as low as $0.03 a litre

As western governments struggle to keep a lid on fuel prices, the leadership of Iran faces a very different problem: its petrol is just too cheap.

Heavy state subsidies ensure that Iranian prices start at just $0.03 a litre, a fraction of the $1.10 paid at US pumps or the $1.88 that motorists in the UK are charged to fill their cars.

Oil-rich Iran vies with Libya and Venezuela, which has proven oil reserves greater than Saudi Arabia, as the countries with the cheapest petrol in the world.

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