Sunday, July 30, 2006

Iran says will continue petrol imports for months

Khaleej Times:
Teheran will import gasoline for the next few months, Oil Minister Kazem Vaziri-Hamaneh said on Sunday, cooling speculation that politically inflammatory rationing could be imminent.

Iranian officials nervous about possible social volatility and energy traders who, in peak periods, send a gasoline tanker to Iranian docksides every two days have been keenly awaiting a decision on whether Iran would ration fuel.

The current process of providing petrol will continue in the next few months,” Vaziri-Hamaneh was quoted as saying by the official IRNA news agency. READ MORE

Vaziri-Hamaneh had earlier predicted rationing from Sept. 23 after parliament slashed Iran’s budget for fuel imports in the year to March 2007.

The world’s fourth-biggest crude exporter has to import about 40 percent of the 70 million litres of gasoline it burns each day owing to a lack of refining capacity.

Commentators say lavish subsidies that keep petrol at nine cents per litre erode Iran’s industrial competitiveness and ensure the Islamic Republic effectively subsidises its neighbours through contraband fuel trading.

Teheran is dangerously polluted, and its roads are normally choked by heavy traffic.

Despite the widely perceived need to rein in usage or start lifting prices, leading parliamentarians say the government will simply tap the country’s abundant dollar reserves to buy imports.

However, parliament has gone into summer recess, so it will be at least two weeks before the government has to decide whether to bypass the budget cut.