An imminent explosion in Iranian fuel prices will see Iran Khodro provide up to 100,000 dual-fuel engines this year.

The Iranian government will shortly hike gasoline prices by more than double as it looks to reduce subsidies to its home market.

"Fuel costs US$0.40 per litre at the moment - there is a kind of subsidy in Iran for fuel," a spokesman for automaker Iran Khodro (IKCO) in Tehran told just-auto.

"But the government announced it will remove the subsidy and the real price will be nearer to $1 per litre."

Such a huge spike in fuel costs will see significant interest in IKCO's new EF7 engine said the manufacturer, with the powertrain designed as dual-use for both gas and petrol, while it also has a collaborative deal with Peugeot for its TU5 engine.

"There is going to be a massive increase in these engines," the IKCO spokesman added, noting the manufacturer's CEO Javad Najmeddin is estimating an uptake of 100,000 of the models this year alone.

"It [EF7] has been planned basically for gas, but it is dual-fuel," said the IKCO spokesman. "There is a small button where you can change from gas to petrol. Consumption is very low and this brand is totally IKCO."

IKCO's Samand and Pars models are available with the EF7, while Peugeot's TU5 engine is also designed for low consumption and is available now.