Iran to halt gasoline imports, impose rationing

Fri Jun 23, 6:40 AM ET

TEHRAN (Reuters) - Iran will halt gasoline imports from September 23 and start rationing gasoline supplies to motorists because of budget constraints, Iranian Oil Minister Kazem Vaziri-Hamaneh said on Friday.

Parliamentarians in the OPEC producer approved a budget for the year to March 2007 that cut the amount to be spent on gasoline imports to $2.5 billion from $4 billion.

This meant President Mahmoud Ahmadinejad's populist government, which draws its support from the poor, was faced with an unappetising choice of hiking petrol prices or rationing, both potential sources of social discontent.

"Next week will be time to decide when we start rationing. Because there is no budget for importing gasoline in the second half of the year, naturally imports will be stopped and gasoline will be supplied by rationing," he said on state television.

"With 99 percent certainty there is going to be no dual pricing system, just rationing."

Despite being the second biggest producer in the Organization of the Petroleum Exporting Countries, Iran has relied heavily on gasoline imports for many years.

It lacks refining capacity after directing most of its oil revenues into social spending. It now imports more than 40 percent of its 70 million litters per day (440,000 barrels per day) of gasoline consumption.

Most of this comes from western Europe, with trading house Vitol the leading supplier, market sources said. India has also featured as a key exporter, at times supplying up to 25,000 bpd.

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