Wednesday, June 27, 2007

Gasoline rationing in Iran causes riots, attack on gas stations

An Iranian gas station was attacked after rationing was announced, according to an AFP report. Iran subsidizes the price of gasoline to ensure popularity of the regime. This has created a huge pollution problem in Tehran and other cities, and also artificially boosted demand for gasoline, robbing Iran of precious export dollars for its poorly exploited petroleum reserves. At the same time, the regime announced strict rationing of compressed natural gas as well. This must be considered in the light of the fact that Iran has the second largest natural gas reserves in the world.

Angry Iranian youths attacked a gas station in the Pounak area of northwest Tehran on Tuesday, burning a car and pumps after the government announced it was going to begin rationing fuel, witnesses said. The youths also threw stones and shouted angry slogans denouncing Iranian President Mahmoud Ahmadinejad.

Since the announcement earlier Tuesday of the rationing plan, which allows for only 100 litres of gasoline per month for private cars, long queues started appearing at fuel pumps not only in Tehran but also in the countryside.

"One car, a Peugeot Persia, was burnt inside the petrol station which was partially on fire," an AFP journalist said after witnessing the attack in Pounak.

"The demonstrators were throwing stones. Anti-riot police deployed in the neighbouring streets intervened regularly to disperse the demonstrators before pulling back," he added.

According to an Iranian journalist, another petrol station in the south of Tehran was attacked in the Azadi area.

Iran's oil ministry issued a statement earlier on Tuesday announcing that the government was launching its long-awaited plan to ration petrol as of the following day.

"From midnight tonight (2030 GMT) petrol for all vehicles and motorcycles will be rationed," state television said in an announcement quoting a ministry statement.

It said private cars using just petrol would be rationed to 100 litres of petrol a month while those that used petrol and compressed natural gas (CNG) would only be allowed 30 litres.

The government said rationing for privately owned cars that either only burn petrol or use petrol and CNG would continue for four months and might be extended to six months at a later date.

The maximum amount of petrol allowed in total for the period was 400 liters for the petrol burning cars and 120 litres for those which consume both CNG and petrol.

The statement added that quotas could be saved and used later.

More than 10 days ago, Iran launched the first phase of the rationing plan, targeting only government vehicles.

The plan aims to reduce colossal state petrol subsidies.

"The maximum quota for each government car at the start of the programme is 10 litres per day," an oil ministry official said at the time.

He did not give details for purchases in excess of this limit but the rationing law passed by parliament in March dictates that these would be at a much higher price.

The significance of the rationing law was only expected to be realised when it was enforced on private car owners, forcing Iranians to pay a higher price for a commodity that now costs less than a comparable amount of mineral water.

Cheap pump prices have encouraged such consumption that the OPEC number two oil producer ironically has to spend billions of dollars each year importing gasoline.

Iran has already raised pump prices by 25 percent, to around 10 cents per litre, and forced consumers to use smart cards to keep track of their purchases.

However, problems in distributing the cards have delayed implementation of the rest of the plan. Pumping gas into the cars is only possible when the smart card is inserted into the pumping machine.

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