TEHRAN (Reuters) – Iran, the Middle East’s biggest carmaker, will stop producing cars that only run on gasoline this month and will instead ensure all new vehicles run on gas too, an official said in remarks published on Saturday.
The announcement follows Iran’s move last month to start rationing gasoline to curb expensive imports the world’s fourth biggest oil exporter must make because it lacks refining capacity to meet domestic demand.
Some cars in Iran, which has the world’s second largest reserves of oil and gas, already run on both gasoline and compressed natural gas (CNG) but most only use gasoline.
“In two weeks’ time, the production of gasoline-only vehicles will be stopped by the Industries Ministry,” the economic daily Jahan-e Eqtesad reported, quoting a deputy industries and mines minister, named only as Hatam.
He did not give details about how the plan would be implemented.
The official IRNA news agency quoted Industries and Mines Minister Mohammad Reza Tahmasbi as saying cars already on the roads in Iran would eventually become “dual-fuel”.
Industry experts say there are more than 25 carmakers in the Islamic Republic, including state-owned or partly state-owned firms. Iran produces a range of light and heavy vehicles.
The biggest carmaker is Iran Khodro which has ventures with foreign firms such as France’s Renault and China’s Chery Automobile Co. It also produces Peugeot models.
Industry specialists say there are 25 automakers in Iran producing light and heavy vehicles.
Under the rationing scheme implemented on June 27, private cars can buy 100 litres (22 imperial gallons) of fuel a month — which many drivers complain is not enough — at the heavily subsidised price of 1,000 rials (11 U.S. cents) a litre.
Vehicles which run on CNG as well are restricted to 60 litres of gasoline a month. There are no restrictions on CNG but drivers say there are far fewer pump stations offering CNG.
Economists say heavy subsidies have encouraged waste and a thriving smuggling trade to Iran’s neighbours. But some say that raising prices, rather than setting quotas, would be a more efficient way of curbing usage.
Some Iranian politicians have said Iran had to take dramatic steps to reduce imports when the country faces the possibility of new U.N. sanctions in a dispute with the West over its nuclear programme.