Saturday, June 30, 2007

Iranian Gov Backs Itself into Corner Over Fuel Rationing

Via Al Jazeera -

Petrols stations are still busy with long queues a day after the Iranian government unexpectedly began rationing petrol.

Al Jazeera's Alireza Ronaghi explains why the Iranian government was forced into an unpopular announcement that caused mayhem in the capital Tehran on Tuesday night.

There has been no petrol rationing system in Iran since 1989, when a limit of 60 litres per month was lifted as the country underwent a period of reconstruction after eight years of war with Iraq.

Mahmoud Ahmadinejad, the Iranian president, was swept to power two years ago hailing a return to the values of the Islamic revolution in 1979 so it is ironical that his government has done something that literally reminds the people of that time.

"The people will get used to it like many other limitations in their lives and the queues will disappear eventually," Siavosh Parand, a Tehran citizen who waited for 35 minutes to reach a pump, told Al Jazeera.


Asghar Tavakkol, a petrol station worker, said the pumps are easily reachable at four in the morning, but most people were not going to find it easy to get used to.

When rationing was announced late on Tuesday, people were taken off-guard and many rushed to stations to get their share of the last drops of limited petrol.

During the hours that followed, at least six gas stations and a bank were set on fire and a chain store was looted by opportunists and thugs who seemed to be awaiting the instability.


Iran is the world's fourth-largest exporter of crude oil, but it has not been able to develop enough refining capacity to produce the petrol it needs.

With one million new cars added every year to the existing engines guzzling petrol in Iran, the country's consumption has hit a record 70 million litres per day, 40 per cent of which has to be imported.

The government has been under pressure since March 2006 to come up with a plan to limit ever-increasing consumption, however it has previously avoided the politically unpalatable decision to ration petrol.

About $5.5bn had been allocated to pay petrol imports, which were heavily subsidised and sold for as cheap as $0.09 per litre, up until March.

But the situation became desperate after the government decided to spend no more than $2.5 billion over the next twelve months.

The new budget was not even enough for six month of petrol imports and imposing a rationing system was the only way out.

The principle element of the plan was to train people to use smart cards when filling their tanks.

Although governmental institutions have been working furiously to prepare the infrastructure and distribute the smart cards, the lack of order and co-ordination has made many people concerned.

Some people have not received their cards yet, and they have been using borrowed smart cards since it became obligatory to use them earlier this month.

Imposing a rationing system has been a tough decision as both the government and the parliament were voted in after advocating populist economic policies.

Ahmadinejad came to power after promising to make poor people's lives easier and distribute the oil money in a fair way, so such a move has been unacceptable to many of his supporters.

The coming months will show how the rationing system will affect Iranian society and politics, but a parliamentary election is planned for March 2008 and the conservative-dominated parliament could be forced to regret its bold decision.

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