Iran General NewsUnrest grows amid gas rationing in Iran

Unrest grows amid gas rationing in Iran


New York Times: Unrest spread in Tehran on Thursday, the second day of gasoline rationing in oil-rich Iran, with drivers lining up for miles, gas stations being set on fire and state-run banks and business centers coming under attack. The New York Times

Published: June 29, 2007

TEHRAN, June 28 — Unrest spread in Tehran on Thursday, the second day of gasoline rationing in oil-rich Iran, with drivers lining up for miles, gas stations being set on fire and state-run banks and business centers coming under attack.

Dozens were arrested, and the Tehran police chief, Ismail Ahmadi Moghaddam, complained to reporters that the police had been caught unaware by the decision to ration fuel.

The anger posed a keen threat to President Mahmoud Ahmadinejad, who was elected two years ago on a platform of bringing income from oil to the nation’s households. Instead, even though Iran is one of the world’s largest producers of crude oil, it has been forced to import about 40 percent of its gasoline at an annual cost of $5 billion to make up for shortfalls in its archaic refining industry.

Some analysts said the decision to ration gasoline was intended to prepare for the possibility of more United Nations economic sanctions as a result of concern over Iran’s nuclear program.

Iran has defied a demand by the United Nations Security Council to suspend uranium enrichment activities, and the Council is debating whether to impose tougher sanctions. Iran contends that its nuclear program is for peaceful purposes.

“Iran’s dependence on imported gasoline has been a focus of international debate over future sanctions,” according to the Eurasia Group, a political risk consultant. “Rationing will reduce Iran’s vulnerability, and Iran’s leadership explicitly mentioned this goal in commenting on the measure,” it said.

Saeed Leylaz, an economist and political analyst in Tehran, said, “The high gasoline consumption has made Iran very vulnerable, and this is a security decision now.”

“We are importing gasoline from 16 different countries,” he said. “The country would be on the verge of collapse if they suddenly decide not to sell us gasoline. The government has to find a way to lower the consumption.”

In Washington on Thursday, leaders of a bipartisan House panel, led by Representative Mark Steven Kirk, Republican of Illinois, and Representative Robert E. Andrews, Democrat of New Jersey, proposed legislation intended to punish any company that provides Iran with gasoline or helps it import gasoline after Dec. 31. Such a company could lose its access to American customers through sanctions.

The Iranian government had planned for a year to ration gasoline but had postponed the move, fearing unrest. Iran offers the highest subsidies for gasoline in the region, buying foreign gasoline for slightly more than $2 a gallon, according to official figures, and offering it for 34 cents a gallon.

“Iran is in a bind,” said Vera de Ladoucette, an energy analyst with Cambridge Energy Research Associates in Paris. “They have acted too late and too harshly.”

According to Ms. de Ladoucette, Iran is also seeking to increase its gasoline production and has outlined plans to spend $18 billion by 2012 to increase its refining capacity by 1.5 million barrels a day from about 1.6 million. The government’s plan is to build four refineries and expand older ones. But, she added, it is unlikely to achieve that goal by 2012. “The problem will be financing all this,” she said.

Parliament voted last month to increase the price of gasoline to 64 cents a gallon. It said that its studies showed that the move would lead to a decline in the consumption. But Mr. Ahmadinejad rejected the proposal and decided to proceed with rationing.

The price of subsidized gasoline was raised by 25 percent last month. The new regulation allows private cars 26 gallons of gasoline a month for 34 cents a gallon. Taxis are allowed 211 gallons a month.

Despite a warning to the local news media to avoid reporting the unrest caused by rationing, newspapers continued to criticize the decision. The daily Etemad Melli wrote that public transportation had been insufficient to move stranded people on streets since Wednesday, when rationing took effect. “The question is if our dear officials enjoy or benefit from causing such unexpected difficulties,” it wrote.

Five gallons of gasoline has been selling for $15 in the black market in Zahedan, in the southeast, the daily Seday-e-Edalat reported.

The Web site Norouz reported that riots had erupted in Ilam on the eastern border and that people had attacked a gas station in Shiraz in the south.

Longstanding discount prices have encouraged gasoline consumption in Iran, where many people believe that the vast oil resources make cheap gasoline a basic right.

“There is no reason why we should pay the same price as people outside Iran do,” said Amir Aram, a carpenter in Tehran. “We have all this oil beneath our feet and have to wait for hours in line to get our ration.”

Some fear rationing could make inflation worse. Many people are dependent on their vehicles as a source of income, and many jobless people or low income government employees use their private cars as taxis.

Mr. Ahmadinejad is facing growing discontent over his economic policies and is being blamed for failing to deliver on his promises to improve the economy. He suffered a setback last December when he lost local elections, and he faces crucial parliamentary elections in March.

“The government will have to back down or face consequences,” said Ehsan Mohammadi, 32, who uses his motorcycle to work as a delivery man. “There are many people like me, and we cannot support our families with rationed gasoline.”

Nazila Fathi reported from Tehran and Jad Mouawad from New York.

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