Giant crude producer Iran to ration petrol, stop imports

TEHRAN, June 23, 2006 (AFP) - Iran said Friday it will stop importing petrol in September and begin rationing it, ironic for a country that is OPEC's number-two exporter of crude oil.



"As there is nothing provisioned for petrol imports in the second half of this (Iranian) year's budget ...

the imports will naturally stop and petrol will be rationed," Oil Minister Kazem Vaziri Hamaneh said on state television.

The minister said imports will end from September 23, and that the government will decide at a meeting next week when to begin the rationing.

Iran's refineries have a capacity of 40 million litres of petrol a day, but demand is close to 70 million litres.

Petrol is extremely cheap in Iran thanks to massive subsidies.

A litre of regular petrol costs just 800 rials (nine US cents, or 34 cents a gallon).

Super costs 1,100 rials (12 cents, or 45 cents a gallon).

An explosion in car ownership and petrol smuggling to Iran's neighbours, where prices are far higher, has caused an explosion in demand.

Iran loses more than one billion dollars a year because of the smuggling.

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The shortfall has up to now been met by spending billions of dollars each year on import