Iran Gasoline Rationing Provokes Panic Buying

by Reuters
17 June 2007

Some Iranians are stocking up on gasoline amid uncertainty over when a delayed rationing scheme will take effect, an official from a body representing pump stations was quoted as saying on Saturday.

Nasser Raisifar said fuel station managers were concerned about the situation in Iran -- OPEC's second largest oil exporter - with long queues forming in some places and even reports of fights breaking out between car owners.

Despite big energy reserves, Iran lacks refining capacity to meet domestic fuel demand, which analysts say is rising at about 10 % a year. Heavy subsidies which drain state coffers make fuel so cheap it encourages waste, analysts say.

The first phase of gasoline rationing started on Thursday, limiting fuel that drivers of government cars can buy. But ordinary Iranians still do not know when the full plan will be implemented and what their quota of subsidised fuel will be.

"Uncertainty and not trusting (government) decisions lead many to fill their tanks continuously and this caused long queues at fuel stations," Raisifar, from the association of fuel station managers, told the semi-official Mehr News Agency.

"This shows people are stocking up," he said.

His comments seemed to be at odds with statements by Iranian officials that consumption has fallen since the gasoline price was increased by 25 % to 1,000 rials (11 U.S. cents) per litre in May -- still among the world's cheapest.

Drivers must also produce electronic "smart" cards to buy any fuel.

Iran has to import about 40 % of daily consumption estimated at 75 million or more litres, a sensitive issue as world powers have threatened to ratchet up U.N. sanctions over Iran's nuclear programme.

Officials have sent conflicting signals about when full rationing would be in place. Some say it might be on June 22. MPs have said fuel above the rationed quota would be offered at market rates but no official announcement has been made.

"Fighting among car owners, very long queues ... have created insecurity," Raisifar said. "Fuel station managers are concerned about the situation."

The United States, which is leading efforts to isolate Iran over its atomic plans, has said Iran's gasoline imports are a point of "leverage". Washington accuses Iran of seeking to build nuclear weapons, a charge Tehran denies.