In Iran, living in the moment
In Iran, living in the moment
By Kim Murphy, Los Angeles Times Staff Writer
August 23, 2007
MAHMUD ABAD, IRAN -- It is a rare three-day summertime weekend, and that means a headlong rush out of sweltering, smoggy Tehran toward the shores of the Caspian Sea.
The narrow highway is hopelessly jammed; drivers abandon their cars for the kiosks selling sodas, ice cream bars and hand-woven souvenir baskets along the roadside. Families despairing of a hotel room spread out straw mats four rows deep on the sidewalks and parking lots of this beach town, snoozing for the night alongside itinerant rice harvesters.
On the wide public beach, men help their sons build sandcastles and women wearing long nylon coats and flowing head scarves plunge eagerly into the tumbling waves, giggling and shouting like raucous black seabirds in the cool saltwater.
Did someone say there was a gasoline shortage?
Since June, Iran has rationed gasoline to about 26 gallons a month for most private cars, leaving many families doubtful about their summer vacation plans and raising fears of pandemonium when school resumes in September and burned-through ration allocations run dry.
The rationing program is designed to stem the nation's crippling reliance on imported gasoline, in a country that has one of the world's largest proven oil reserves. The dependence on foreign gasoline, a result of the country's shortage in refinery capacity, is costing Iran more than $5 billion a year and rendering the nation vulnerable to the possibility of a new round of international sanctions that could cut off the fuel shipments.
The rationing has become the eventual focus of most conversations in Tehran, and the catalyst for a robust black market in fuel as holiday-makers seek ways to get to the shops and the seashores.
Although bookings have been down 25% to 30% here in the popular Caspian beach resorts since the rationing took effect, the crowd for the three-day holiday weekend this month was as big as ever. Hotels were turning away disappointed carloads of beachgoers well into the night. In restaurants offering plates of grilled sturgeon, Caspian trout heaped with coriander and saffron-sprinkled rice, diners were elbow-to-elbow.
Morteza Zarif Ali Hosseini, a printmaker, was camping in a dome tent along the beach with his wife, child and brother's family (they had crammed into one car for the 3 1/2 -hour journey from Tehran). He said he saved up his gas allocations for the long-planned trip.
"Praise God, once a week we use the car now," he said.
Iranian officials announced that average gasoline consumption had declined by more than 20% shortly after it began the rationing in late June. The rationing program is an effort to reduce the country's vulnerability in the event the United Nations elects to target gasoline exports to Iran when it reviews the nation's nuclear program.
"It's not just a matter of U.N. sanctions. Just to give you an idea, since 10 years ago, we have tripled the amount of gasoline we import. And if we don't stop it, we have no idea what this will lead to," said Mohammed Sadegh Jenan Sefat, an economics writer for the Tehran-based publication Kargozaran, which is allied with the party of former President Hashemi Rafsanjani.
What has many economists and officials worried, though, is that the "smart cards" issued in June with six months' worth of gasoline allocations may already be running close to empty for many families.
Considering that the debut of rationing sparked riots at a dozen gas stations, banks and department stores, officials here are worried -- so much so that parliament is seriously considering upping the allocations.
"To imagine what would happen if the government says, 'OK, this is the ration -- no more allocations.' We cannot imagine this scenario," Sefat said.
"For now, people are just seizing the moment and consuming what they can. They're not thinking about the future. So their behavior is completely unpredictable."
In Tehran, taxi rates have skyrocketed, not only because drivers must buy extra fuel at black-market prices, but because many have elected not to drive at all, finding it just as profitable to sell their ration allocations to other drivers.
"I'd guess that as many as 50% of the sedans in this city have run out of their allocation already, and the rest are about to run out," said Ahmad, a Tehran taxi driver who would give only his first name. He made his living driving a taxi in the capital until recently, when selling his 238-gallon-a-month gas allocation suddenly seemed easier and more lucrative.
On a recent afternoon, he stood at a busy street corner and hopped into a taxi cruising past. He went with the driver to the gas station, where he used his rationing card to fill the man's gas tank and stuffed a large wad of riyals into his pocket before being dropped off down the street.
"There are all these rumors that taxi drivers are misusing these opportunities. But in fact, we're just helping our fellow citizens if they are in distress," he said.
In Tehran, he said, black marketers are selling gas for 300% above the ration price of 42 cents a gallon. "But out in the provincial cities, the price is much, much more. People are desperate there. You have people stalking the streets for gas."
Still unclear is whether the rationing program has stemmed the seepage of subsidized Iranian gasoline across the borders into Turkey and Iraq, where steeply higher prices have contributed to a robust smuggling network.
Bijan Bidabad, a former central bank economist, estimated that half of the fuel savings so far may be from an interruption of smuggling networks. "But ultimately, the rational solution to stop the smuggling is to equalize the prices," he said.
That's something the government, fearful of a backlash, still seems unwilling to do.
Instead, it is increasing production of hybrid cars that use compressed natural gas, moving to increase refinery capacity and preparing, it seems, to dole out more gas allocations.
Kamal Daneshyar, chairman of the parliament's energy committee, said the government had been looking at a $9-billion tab to import gasoline this year before the rationing program cut the cost by $4 billion.
"We are pushing in parliament to force the government to announce a free market rate above the rations, so that nobody is in trouble because of the unavailability of gas," he said.
Absent that, he said, "I believe that the government is willing to announce more allocations."
And what if the U.N. eventually elects to block gasoline exports to Iran?
"It's a good excuse for the government to impose stricter rationing," Daneshyar said. "With stricter rationing, with more and more public buses and less high-consumption cars, then we can cope with any restriction."
