No non-rationed petrol quota in Iran for now, says speaker

Jul 17, 2007, 9:07 GMT

Tehran - There would for the time being be no non-rationed petrol quota in Iran, Speaker of Parliament Speaker Gholam-Ali Hadad- Adel said Tuesday in the leading oil producing country where petrol was rationed recently.

'If we tell the people as soon as your ration is finished you can get petrol at a higher price then the people would never find ways to make the optimal use of petrol,' the speaker was quoted by Mehr news agency as saying.

'This would be like putting a soft pillow under their heads. People should learn how to save petrol and not what to do not to save,' Hadad-Adel added.

Since June 27, petrol in Iran has been rationed to 100 litres per month for normal cars, 300 litres for government cars and 800 litres for taxis, with a litre of normal petrol costing 0.108 dollars and 0.151 dollars for a litre of super petrol.

Government and parliament had however announced before rationing that additional quotas at higher - around 0.65 to 0.95 dollars - or floating rates would be allocated to people whose livelihoods depend on their cars.

Although Iran is a leading OPEC member and the world's fourth biggest oil producer at 4.2 million barrels per day, the Islamic state must import almost half of the country's petrol needs and spend 5 to 8 billion dollars annually on imports due to a lack of refineries and a preference for oil exports.

Also Iranian President Mahmoud Ahmadinejad is against a non-rationed petrol quota and says that the open-market petrol price would lead to more inflation. He further wants to decrease the nationwide consumption of 80 million per day to under 60 million litres.

Ahmadinejad has already called on car drivers to switch from petrol to the compressed natural gas system (CNG) to further decrease the need for petrol imports and further obliged local automobile makers to produce dual-fuel cars running on both petrol and CNG.

The rationing plan is very unpopular in Iran as the people can simply not understand why in one of the world's oil-richest countries, petrol should be rationed.

Since the introduction of the plan however the capital Tehran has seen a visible decrease in traffic congestion, improvement in air quality, a 20-per-cent drop in traffic jams, and a 30-per-cent reduction of accidents.

Despite strict government control, prices - and not just taxi rates - have already been increasing following the implementation of the rationing plan.

Observers believe the plan could dent Ahmadinejad's popularity ahead of next March's parliamentary elections or even negatively affect his chances of being re-elected as president in 2009.