KUWAIT CITY (AFP) – Iran will propose a package of measures to curb gasoline (petrol) imports that include raising prices and rationing.
“The government is working on draft legislation that will be presented to parliament by the end of September to lift the prices of gasoline and other basic petroleum products to market levels in a phased process over five years,” Deputy Oil Minister Mohammad Reza Nematzadeh told the Cyprus-based industry newsletter Saturday.
Other measures included a nationwide rationing plan and an accelerated expansion and upgrading of domestic refineries, said Nematzadeh, who is also managing director of the National Iranian Oil Refining and Distribution Company (NIORDC).
The official IRNA news agency reported on September 5 that the government had requested an additional 3.5 billion dollars from parliament for petrol imports to meet a shortfall caused by lavish consumption.
The amount was intended to cover imports in the remaining months of the current Iranian year, which ends in March 2007.
In February, parliament approved a 2.5-billion-dollar budget for imports that was expected to run out by late September because of higher import prices, rising consumption and cross-border smuggling of millions of liters of petrol every month.
Iran is the second largest OPEC crude oil producer with around four million barrels per day (bpd) but its refining capacity is only 40 million liters of petrol a day while demand stands at more than 70 million liters.
Heavily subsidized petrol in the country currently sells for 800 rials (nine US cents) a liter, or 34 US cents a gallon.
Nematzadeh acknowledged that the issue was politically difficult and that price rises would face opposition from MPs.
“We dont know what will be accepted but this is what we are now working on,” he told the September 11 edition of MEES.
Domestic measures were expected to reduce consumption by 30 percent in five years, wiping out around 75 percent of Iran’s import requirements which are estimated at 30 million liters a day, he said.
Nematzadeh said a rationing programme for the country’s 15 million vehicles was expected to start in about four months.
NIORDC was also working on a 16-billion-dollar plan to increase refining capacity from 1.6 million bpd to 2.7 million bpd in five years, he said.
The plan involves the building of three new refineries and the upgrade and expansion of existing ones.
Meanwhile, Iran was negotiating deals to construct refineries fed by Iranian crude in China, Malaysia, Indonesia and Singapore, said Nematzadeh.
He expected work on three refineries to begin within a year.