Iran General NewsIran starts phased fuel rationing, amid confusion

Iran starts phased fuel rationing, amid confusion

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Reuters: Iran started the first phase of gasoline rationing on Thursday, limiting fuel that drivers of government cars can buy, but many Iranians are still confused about how and when the full rationing plan would be in place. By Edmund Blair

TEHRAN (Reuters) – Iran started the first phase of gasoline rationing on Thursday, limiting fuel that drivers of government cars can buy, but many Iranians are still confused about how and when the full rationing plan would be in place.

Fuel station workers said they were now implementing the first stage of rationing to limit government-owned cars to 300 litres a month. But one said he was not sure what would happen if drivers of such cars wanted to buy fuel above that amount.

Despite big energy reserves, Iran lacks refining capacity to meet domestic fuel demand, which analysts say is rising at about 10 percent a year. Heavy subsidies which drain state coffers make fuel so cheap it encourages waste, analysts say.

The No. 2 OPEC oil producer has to import about 40 percent of daily consumption estimated at 75 million or more litres, a sensitive issue as world powers have threatened to ratchet up U.N. sanctions over Iran’s disputed nuclear programme.

“We had many government-owned cars coming here this morning for fuel and the rationing has started,” said Ali Kalhor, a manager at a fuel station in central Tehran. “We still do not know the price of extra fuel if anybody wants it.”

Some lawmakers have said fuel above the rationed quota would be offered at market rates but no official announcement has been made. Officials have sent conflicting signals about when full rationing would be in place, some say it might be on June 22.

DEBATE ABOUT THE PLAN

Critics question whether rationing government cars will help reduce the state’s fuel subsidy bill or cut consumption. One former official said those who drive state cars claim fuel on expenses so — subsidised or not — the government still pays.

“The person sitting behind the wheel of a government car is not worried about the future of gasoline rationing because in the end, if he doesn’t get enough fuel, the one who would be harmed is the government,” said one fuel pump attendant.

Some lawmakers say the rationing plan should be reviewed.

“This plan shouldn’t be implemented as long as we don’t have a general and complete plan for rationing gasoline that people like,” lawmaker Qodratollah Imani was quoted by Poul newspaper as saying. He said parliament might debate scrapping the idea.

So far, the government has raised the subsidised fuel price by 25 percent to 1,000 rials (11 U.S. cents) a litre, which is still some of the cheapest fuel in the world. Drivers must also produce electronic “smart” card to buy any fuel.

But the government has not said how much fuel would be given to ordinary drivers once rationing is enforced. One official suggested a figure of 90 litres per day, an amount dismissed by drivers as too little.

Traders who send two or more cargoes of fuel to Iran each week have been monitoring the rationing debate closely.

The United States, which is leading efforts to isolate Iran over its atomic plans, has said Iran’s gasoline imports are a point of “leverage.” Washington accuses Iran of seeking to build nuclear weapons, a charge Tehran denies.

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