AFP: Iranian President Mahmoud Ahmadinejad said Monday that any sales of petrol outside a rationing plan would fuel already-rampant inflation, state news agency IRNA reported.
TEHRAN, July 9, 2007 (AFP) – Iranian President Mahmoud Ahmadinejad said Monday that any sales of petrol outside a rationing plan would fuel already-rampant inflation, state news agency IRNA reported.
“To specify a ‘free’ price for petrol under the current conditions is not a good approach,” said Ahmadinejad.
Iran’s decision to ration heavily subsidised petrol at 100 litres (22 gallons) a month for private car owners sparked violent protests when the measure was enforced late last month.
Government officials have since raised the possibility of allowing additional fuel onto the market but at a higher, unrestricted price which it calls “free.”
“In the current situation, setting a ‘free’ price for the gasoline would be a dangerous poison for the economy because that would cause inflation of 100 percent,” Ahmadinejad warned.
The president stressed this would even affect the vast majority of Iranians “whose petrol consumption does not exceed the fixed quotas.”
He left the door open, nevertheless, for the possibility of boosting petrol supplies at some stage in the future.
“We will be able to do this when we are sure that the other prices will not increase,” said the president.
Iran posted an inflation rate of 13.5 percent in the year to March 2007, but parliamentary research shows that consumer prices have since already risen by 22 percent.
The petrol rationing plan has already had an inflationary effect on services and consumer products.
It has also reduced consumption, according to the president, who explained that the “daily sale of petrol has fallen by 20 million litres” since the introduction of rationing on June 23.
Last week, the company in charge of distributing petroleum products for the oil ministry said consumption had dropped by six million litres to 72 million litres a day.
Iran is the world’s fourth largest oil producer, but must import around 40 percent of its petrol requirements due to a lack of refineries.
