Sunday, August 15, 2004

Iran faces petrol crisis

Khaleej Times Online: "Iran faces petrol crisis

15 August 2004

TEHERAN - Leading crude oil producer Iran faces a growing shortfall in supplies of vehicle fuel, with heavily-subsidised petrol (gasoline) consumption reaching 70 million litres a day, the oil ministry's news agency Shana reported yesterday.
Average consumption has reached 66 million litres, compared with a daily output by Iran's refineries of some 39 million litres, obliging the Islamic Republic to import the rest at an annual cost of 1.5 billion dollars. Despite a 23 per cent price hike for the Iranian year that started March 20, pump prices are still only 800 rials (less than 10 US cents) a litre for standard, lead-free petrol and 1,100 rials for super. This is close to 2.5 times less than the real price, with the difference being made up by subsidies totalling 3.5 billion dollars a year.
This not only makes for heedless consumption in a country with inadequate public transportation and a large number of old and uneconomical cars, but massive smuggling of fuel to neighbouring countries. The government is unwilling to raise the price again but is considering other steps along with appeals to cut down on fuel use. One measure just launched is the production of an electronic smart card for buying petrol, enabling individual purchases to be monitored. "


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