Monday, December 8, 2003
Oil rich Iran facing shortages at petrol pumps
Agence France-Presse Tehran, December 8
With fuel consumption up and the government unwilling to run the risk of cutting its hefty subsidies at the forecourt, Iran is facing the prospect of serious petrol shortages in the coming months.
In recent weeks, several provincial cities -- notably Karaj and Qazvin to the west of Tehran -- have seen petrol pumps run dry and motorists experiencing waits of several hours in order to fill up.
Iran may be OPEC's number two exporter, but its skyrocketing local consumption as well as the smuggling of subsidised fuel across to Afghanistan and Pakistan is rapidly eating away at local supplies.
Recent official figures put petrol consumption at 57 million litre per day, a 13 per cent increase on last year. The Islamic republic's refineries, however, can only put out 38.5 million litre a day, meaning the remainder is imported at an annual cost to the government of $1.5 billion.
Overall subsidies costs the government an estimated $3.5 billion a year, a hefty chunk out of the national budget.
The problem is the low cost of a litre of petrol here: at just 650 rials ($0.08), it is among the cheapest in the region. For the government, each litre sold leaves it $0.16 out of pocket.
© Hindustan Times Ltd. 2003.