Would a refined products embargo let Iran reduce fuel subsidies?

A few weeks ago I posted a few times on the proposed embargo on refined product imports on Iran (here, here, here) with the help of a knowledgeable friend; that friend now passes on an interesting rebuttal from NIAC on "Why petroleum sanctions only make things worse." The highlight:

A gasoline embargo actually benefits the government of Iran.

- A gasoline embargo would enable the government to eliminate burdensome subsidies and place all the blame on the United States.
- Iran has to import roughly 40 percent of its domestic gasoline consumption at market prices and then resell it at a subsidized price of about 40 cents per gallon.
- These subsidies cost the government of Iran between 10 and 20 percent of GDP, annually.[i] The Iranian government has tried several times to eliminate the subsidies, but has been stymied by popular opposition. An embargo would provide the excuse they need, and free up the government to spend the money elsewhere.

Eliminating subsidies with perfect timing would be a tricky thing to pull off - the removal of 40% of supply alone will send prices skyrocketing, which removing subsidies would only make worse. Furthermore, if sanctions were removed, the government would be hard-pressed to not reinstate the subsidies. But the opportunity is undeniably there. Yet another reason why this particular lever on Iran is probably not the best.