Iran General NewsIran votes to impose petrol rationing

Iran votes to impose petrol rationing

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Sunday Telegraph: Iranians are bracing themselves for a fresh round of belt tightening after their government voted to impose petrol rationing coupled with sharp rises in the price of fuel. The Sunday Telegraph

By Gethin Chamberlain and Kay Biouki in Teheran, Sunday Telegraph

Iranians are bracing themselves for a fresh round of belt tightening after their government voted to impose petrol rationing coupled with sharp rises in the price of fuel.

The rationing system will limit Iranians to 22 gallons (100 litres) of petrol a month, two full tanks for a typical family car. It is a direct result of President Mahmoud Ahmadinejad’s adherence to an economic model, based on Iranian self-sufficiency, that has caused housing and other living costs to soar.

The basic price of petrol will rise by 25 per cent, but Iranians who need to use more than the permitted amount will be hit by rises of up to 450 per cent.

Economists predict that the knock-on effect on the average Iranian will be dramatic, with retailers expected to pass on the additional costs to consumers.

Iran is the second largest producer of oil in the Organisation of the Petroleum Exporting Countries but it imports 40 per cent of its petrol – worth about $3 billion a year – after its refining capacity was wrecked in the war with Iraq. It currently sells the petrol at subsidised prices.

Mr Ahmadinejad had publicly argued against the abolition of subsidies and advocated persuading consumers to switch to other fuel sources such as natural gas, which do not rely on foreign imports. But critics say his opposition was manufactured for public consumption. They point out that the price increases had already been factored into his government’s budget.

Some Iranians suspect that the move is also a precautionary measure against further possible sanctions which may be imposed on Iran for pressing ahead with its nuclear programme in defiance of the United Nations security council.

Under the new rules, which will take effect in late spring, motorists will be given coupons entitling them to 100 litres of petrol a month at the increased price of 1,000 rial (about 5p) per litre. Additional petrol will have to be bought at open market prices of between 14p and 22p per litre.

The plan was due to be introduced on March 21 but has been delayed for three months to allow time for the distribution of ration cards. Some drivers have been issued with the cards but at least half are still waiting to receive them. Work to fit the nation’s petrol pumps with card readers is not yet complete.

Iranian consumers said the changes would push up inflation. Djamile Ershadi, 70, a retired government clerk, said: “Everything has gone up. You cannot live on an ordinary salary any more. Life has become much harder.”

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