Tehran, Nov 16 (IANS): The Iranian government started rationing of subsidized gasoline and increased its prices.

Mohammad Baqer Nobakht, head of the Planning and Budget Organization of Iran, said that proceeds from the price hikes would be used to fund additional subsidies for 18 million underprivileged families, which amounts to about 60 million people, Tehran Times daily reported on Friday.

According to a statement published by National Iranian Oil Products Distribution Company, the price for a liter of subsidized gasoline was increased to 15,000 rials (nearly 35 cents at the official rate of 42,000 rials per dollar) from the earlier 10,000 rials, Xinhua news agency reported.

The statement said that the monthly ration for each passenger car is set at 60 liters. Additional purchases would cost 30,000 rials per liter.

Due to heavy subsidies and devaluation of its currency, Iran has one of the cheapest fuel prices in the world and the country has been fighting rampant fuel smuggling to neighbouring countries.