Iran says fuel consumption down 27%

Iran says fuel consumption down 27%
30 July 2007
by Reuters

Iran's daily gasoline consumption has dropped by about 20 million litres since the No. 2 OPEC oil producer started to ration motor fuel in June, Oil Minister Kazem Vaziri-Hamaneh was quoted as saying on Sunday.

He did not specify how much fuel Iranian drivers were now using but officials had said Iran consumed 75 million litres a day, 40 % of which was imported, before rationing was introduced on June 27.

"During this time 20 million litres of gasoline was saved per day on average," state television quoted Vaziri-Hamaneh as saying.

The move last month to start rationing gasoline sparked protests by motorists used to cheap, abundant fuel. It aimed to curb consumption in the Organization of the Petroleum Exporting Countries member, which does not have enough refining capacity to meet domestic gasoline needs.

Some Iranian officials had worried costly fuel imports were making the country increasingly vulnerable when world powers are considering ratcheting up United Nations sanctions against Iran over its atomic plans.

Iranian oil official Hojjatollah Ghanimifard said on July 17 his country would cut its gasoline imports by at least 14 % from August.

Private drivers receive 100 litres of fuel a month at the heavily subsidised price of 1,000 rials (11 U.S. cents). Many complain it is not enough and have urged the government to offer more, even if they have to pay a higher price.

But the government fears this would send inflation, now running at about 16 % year-on-year, even higher.

The United Nations has imposed two rounds of sanctions over Tehran's failure to halt disputed nuclear work the West says is aimed at building atomic bombs. Iran dismisses this charge, saying it only wants to generate electricity. A third set of sanctions is now in preparation.

The United States, leading efforts to isolate Iran, has described Tehran's gasoline imports as leverage in the row.

Iran opposed to OPEC output hike

Iran opposed to OPEC output hike
by Safura Rahimi
30 July 2007
Reuters

Iran firmly opposes a possible hike in OPEC's crude oil output aimed at curbing rising oil prices, Iranian state television reported on Sunday.

Iranian Oil Minister Kazem Vaziri Hamaneh has said the recent surge is due to political tensions and a shortage of gasoline in the US, and not linked to OPEC's recent cutbacks.

He added that in the current conditions, boosting oil production will not have an effect on oil prices as ‘political and geopolitical reasons' are driving rise and fall in the market.

The oil price has surged over the past month to near-record highs as supply concerns draw investor interest.

OPEC President Mohammed al-Hamli said last week that the organisation was worried high oil prices might hurt the world economy - remarks that fuelled speculation of a possible OPEC output hike.

OPEC is set to have its next regular meeting on September 11 at its headquarters in Vienna.

However, Oil Minister Vaziri Hamaneh said he did not think OPEC would put the issue of changing its output level on the agenda, according to Iran's Jomhuri-ye Eslami newspaper.

Iran's Radioactive Russian Invoices

Iran's Radioactive Russian Invoices
By Pavel Romanov
Jul. 16, 2007
EnergyTribune.com

Iran’s nuclear aspirations may not end with a bang or even a whimper. Instead, their demise may be due to a stack of unpaid invoices. By the end of May, the Iranian government owed Russia’s RosAtom more than $100 million for work done on the Bushehr nuclear power plant. And the Iranians have no apparent desire to pay their bills. In late May, a RosAtom official said that “it seems that the Iranians have lost interest” in the Bushehr plant, continuing that the “project has become unprofitable for us.”

There have been ongoing squabbles over payment. Under the contract terms, Iran is supposed to pay RosAtom about $25 million a month. In late 2006 after months of non-payment, Iran resumed payments and assured that it would stay current. RosAtom resumed construction at Bushehr, sending 2,000 Russian workers on-site. But the money problems continue. Sergey Kirilenko, the head of RosAtom, has said that the Bushehr plant could be finished within a few months, provided that Iran pays its bills.

Russia delays Iran nuclear plant to 2008

Russia delays Iran nuclear plant to 2008
by Reuters
25 July 2007

Russia has no chance of finishing Iran's first nuclear power station before autumn 2008, a year behind schedule, a Russian subcontractor helping to build the plant told RIA news agency on Wednesday. Russia has used the Bushehr nuclear plant as a lever in relations with Tehran which chilled this year after a row over missed payments for building the plant in southwest Iran.

Completion of Bushehr is likely to trigger a sharp reaction from the United States, which fears Iran's nuclear programme would be strengthened by the delivery of Russian nuclear fuel.

Atomstroiexport, the Russian state firm building the plant, said a shortage of payments from Iran was undermining confidence in the Bushehr project.

"Today we can say for sure that to launch the Bushehr nuclear plant this autumn is unrealistic," said Ivan Istomin, the head of a subcontractor called Energoprogress that is working for Atomstroiexport, RIA reported.

"A realistic time frame for starting the reactor... is moving to autumn 2008," he said.

Russian arms sales and nuclear cooperation with Iran have strained relations with Washington, which suspects Tehran of using seeking to develop atomic weapons under the cover of its civilian nuclear programme.

Moscow says Tehran does not have the capability to make nuclear weapons. But some senior officials are wary of relations with Iran and say Russia's interests are not served by Iran gaining nuclear weapons.

Iran says it has a right to develop its civilian nuclear sector and that its nuclear programme is not aimed at developing nuclear arms.

Mohammad Saeedi, deputy head of Iran's Atomic Energy Organisation, and Javad Vaeedi, Iran's deputy nuclear negotiator, were in Moscow on Wednesday for talks, an Iranian nuclear official told Reuters.

A Russian nuclear official said the talks would focus on "efforts to stabilise the situation around Bushehr."

CONFIDENCE UNDERMINED

Russia has said it will stick to the project, worth about $1 billion. But Atomstroiexport said Iran was still paying just a fraction of the $25 million a month needed to finish the plant.

"Confidence in the project has been undermined," said Atomstroiexport spokeswoman Irina Yesipova. "It is an unstable situation where there are lots of announcements but no money."

Iranian officials insist they have made payments on time and say Moscow is delaying because of Western pressure.

"There is just not sufficient financing and that has influenced confidence, the confidence of the Russian side and Russian subcontractors towards the Bushehr project and towards Iran," Yesipova said.

Russia in February delayed the launch of the plant - planned for September 2007 - citing payment problems. Russia also delayed sending nuclear fuel to Bushehr as it had earlier planned for March 2007.

Russia has traditionally been seen as Tehran's closest big-power ally but senior Russian officials have expressed exasperation with Tehran's negotiating tactics.

They cite the more extreme pronouncements of Iranian President Mahmoud Ahmadinejad, who has called for wiping Israel from the world's map.

Iran's Oil Ministry

Oil Falls a Third Day on Signs U.S. Refiners Increased Output
By Mark Shenk
July 24 (Bloomberg)

Crude oil fell for a third day on speculation that U.S. refineries are increasing their fuel production and a signal that OPEC might be willing to pump more.

A report tomorrow may show refineries operated at 91.6 percent of capacity, a 10-month high, according to a Bloomberg News survey. OPEC will raise output if required, an official of Iran's Oil Ministry said. Hedge-fund managers and other large speculators cut long positions, bets that prices would rise, last week, according to the U.S. Commodity Futures Trading Commission.

``We are seeing a shift in sentiment,'' said Tim Evans, an energy analyst at Citigroup Inc. in New York. ``Rising refinery runs will eventually boost product stocks, and if they are comfortable you don't need a long position in crude.''

Crude oil for September delivery fell $1.57, or 2.1 percent, to $73.32 a barrel at 11:23 a.m. on the New York Mercantile Exchange. Futures reached $76.13 on July 20, the highest intraday price for a front-month contract since Aug. 10. Prices are up 20 percent this year.

Brent crude oil for September settlement declined $1.56, or 2 percent, to $75.30 barrel on the London-based ICE Futures exchange.

``If the oil market needs it, OPEC will inject more oil into it,'' said Javad Yarjani, head of OPEC affairs at Iran's oil ministry, according the Islamic Republic News Agency. Iran is the second-biggest oil producer in the Organization of Petroleum Exporting Countries. Saudi Arabia is the largest producer.

`Only Real Debate'

``The Iranians are normally price hawks, so this is a sign that the only real debate at the next meeting will be about how large the increase will be,'' Evans said.

Oil ministers from OPEC's 12 members will meet on Sept. 11 in Vienna to discuss production targets. The group pumps about 40 percent of global crude supply.

``I have received no complaints from any customers about a shortage of crude supplies,'' Qatari Oil Minister Abdullah bin Hamad Al-Attiyah said in a telephone interview today. ``OPEC should move when there is strong evidence that there is a shortage in crude supplies.''

OPEC members have said that oil markets have plenty of crude oil and price increases were caused by geopolitics and refining bottlenecks. The 10 members that have quotas pledged to trim a total of 1.7 million barrels a day from production in two rounds of cuts, one that started Nov. 1 and another that took effect Feb. 1.

`Critical Point'

``We're at a critical point,'' said Peter Beutel, president of Cameron Hanover Inc., a New Canaan, Connecticut, energy consultant. If we can't break out above $77.50 and test the old highs, prices could be heading to the $60 area. If prices get above $77.50, I see us rising $17.50 higher as we breach the old record.''

New York oil rose to a record $78.40 a barrel on July 14, 2006, on concern fighting in Lebanon between Israel and Islamic militia Hezbollah would spread through the Middle East.

Suncor Energy Inc. said yesterday that its oil-sands production is returning to full strength after a 50-day shutdown at a Canadian processing plant. The shutdown began May 31 and cut output by half, to roughly 121,000 barrels a day, the Calgary- based company said. Canadian oil travels through pipelines to the U.S. Midwest.

The crude-oil market often follows gasoline during the summer driving season. U.S. gasoline demand peaks between the Memorial Day holiday in late May and Labor Day in early September.

Gasoline for August delivery plunged 5.34 cents, or 2.5 percent, to $2.0507 a gallon in New York. Futures touched $2.031 a gallon, the lowest since April 18. Prices are heading for the ninth decline in 10 days.

Oil Revenues Are Alarming, Economists Warn Ahmadinejad

Fariba Sarraf - 2007.07.16
Rooz Online

A group of Iranian economists warned President Mahmoud Ahmadinejad that “oil revenues are alarming, and the government must not increase expenditure simply because revenues have increased.”

The same group of economists wrote a letter last year to President Ahmadinejad criticizing his government’s economic policies. Last month, they published a second letter calling on the President to “review the administration’s economic policies” and “take a fundamental step towards improving the nation’s economic conditions.” In response to that letter, individuals affiliated with the administration accused the economists of engaging in “politicking” and even fabricating data.

According to E'temad Melli daily, however, “After reviewing the letters, officials in the administration decided to invite the economists to the President’s office in order to discuss their concerns.”

In that meeting that lasted more than 5 hours according to a report published by the Iranian Student News Agency [ISNA], economists argued that the country was experiencing a second Dutch Disease as a result of the administration’s expansionary fiscal policies. They also raised their concern about the state’s increasing oil revenues in the past two years – exceeding 120 billion dollars – telling the President that they were worried about “losing an unprecedented opportunity.”

One of the economists present in that meeting, Zahra Karimi, told reporters, “It seemed as if Mr. President only wanted to say that our criticisms were not fair, and that his administration’s performance fares much better compared to that of previous administrations. He said that he looks forward to new data that will prove his administration’s claims.”

Sarmaye, a daily published by one of the disgruntled economists, Hasan Abdeh Tabrizi, quoted an economist present at the meeting – Dr. Meidari – as having said, “oil revenues are alarming. Oil is ominous and the government must not increase expenditure simply because revenues have increased.”

The Donyaye Eghtesad [“World of Economics”] publication quoted another economist present at the meeting: “It appears as if the administration regards two important financial institutions as obstacles facing the implementation of its desired policies: one is the Budgetary Management and Planning Organization of Iran, which oversees planning and budgetary procedures, hence controlling the allocation of resources among public institutions; and another is the country’s banking system, which plays a fundamental role in distributing funds to private and public firms. Perhaps these two institutions, the Budgetary Management and Planning Organization and the banking system, have not performed their duties as well as they should have given the country’s special economic conditions; but we do not approve of the government’s treatment of them either. With this kind of treatment, the country’s financial conditions will worsen even more.”

Iran, Reversing Ban, Will Open Reactor to U.N. Inspectors

July 14, 2007
Iran, Reversing Ban, Will Open Reactor to U.N. Inspectors
By THE ASSOCIATED PRESS

United Nations nuclear inspectors, banned by Iran earlier this year from visiting a heavy-water reactor, will be allowed to inspect it before the end of July, the International Atomic Energy Agency said Friday.

The agency, which is based here, said Iran had also agreed to answer questions on past experiments that could be linked to a weapons program.

For years Iran has failed to cooperate with the agency on the agency’s terms, leaving it unable to ascertain the truth of Iran’s claims that it has no plans to build nuclear weapons and that its atomic activities are meant strictly to generate energy. Its refusal to cooperate or stop enriching uranium prompted the United Nations Security Council to pass two sets of sanctions.

Any Iranian decision to cooperate could weaken a push by the United States and Western allies on the Council to impose new sanctions.

In talks between Iranian officials and the agency’s deputy director general, Olli Heinonen of Finland, “agreement was reached” to allow an inspection of the heavy-water reactor at Arak by the end of July, the agency said in a statement.

The two sides also agreed on how “to resolve remaining issues regarding Iran’s past plutonium experiments.”

Access to the Arak reactor is an important part of any survey of Iran’s nuclear activities because it could produce plutonium once completed, sometime in the next decade.

Because plutonium and enriched uranium can be used in warheads, the Security Council demanded a stop not only to enrichment but also to construction at Arak.

The Council also sought full openness about the work at Arak; more than two decades of nuclear activities went undetected until disclosed four years ago by an Iranian dissident group.

Venezuela Agrees To Sell Gasoline To Iran

Venezuela Agrees To Sell Gasoline To Iran
Jul 4, 2007

Venezuela has agreed to sell gasoline to Iran, the South American county's energy minister said in comments published Tuesday, a week after the Islamic country imposed a fuel rationing program that has sparked violence.

"Yes, Iranians have asked to buy gasoline from us and we have accepted this demand," Rafael Ramirez told the Iranian daily newspaper Shargh. The reformist daily said Ramirez refused to elaborate on the deal.

During a visit to Iran this week, Venezuelan President Hugo Chavez called the two "strategic partners." Ramirez accompanied Chavez on the visit.

Last week, the Iranian government began rationing fuel, causing angry Iranians to smash shop windows and set fire to dozens of gas stations in the capital Tehran and several other cities.

The government says the fuel rationing will free up funding for development projects and make the country "invincible."

Iran is one of the world's biggest oil producers, but it doesn't have enough refineries, so it must import more than 50% of the gasoline its people use from abroad.

© 2007 Dow Jones Newswires

Banning the story

"What can I do with three liters? Set myself on fire? Please let the authorities hear my voice that we cannot live like this. Life has become very difficult for us, I cannot support my wife and children anymore."

http://www.rferl.org/featuresarticle/2007/06/1cf0d8b2-d8e1-421e-9737-48063be9ef08.html