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Iran faces huge gasoline shortage The rise in domestic consumption will not allow Iran to export any diesel fuel in the current Iranian year, according to source.

'This is a very heavy burden on the government..'

August 21, 2000, 02:41 PM TEHRAN (Reuters) - Iran, OPEC's second largest oil producer, plans to import about $3 billion worth of gasoline over the next five years, a senior energy official was quoted as saying on Monday. "This is a very heavy burden on the government. The high consumption of gasoline is a major problem for the country," Reza Kasaeizadeh, who coordinates refinery policies, told the Hamshahri daily.

Iran will pay an estimated $7.5 billion in subsidies for refined oil products in the year begun in March, of which $2 billion alone would go towards subsidising gasoline prices, he said.

Iran has some of the world`s lowest fuel prices, with a litre of regular petrol selling for several US cents.

Periodic government attempts to raise prices in order to limit demand and ease the burden on the budget are generally beaten back by a parliament fearful of public reaction.

Huge domestic shortage

An official said recently that Iran's consumption of oil products exceeds international norms by an order of 10, forcing it to import six million litres of gasoline per day.

He said average daily consumption of oil products was estimated at 46 million litres, enough to put the country on a par with India, which has more than 12 times the population.

Kasaeizadeh said Iran, which has the world's second largest gas reserves, should switch to using more gas and also improve quality of its roads and technology in car-making to save gasoline.

He said Iran would not be able to export any diesel fuel in the current Iranian year, which began on March 20, because of a rise in domestic consumption of more than 10 percent.

Liquefied natural gas for exports has also been diverted for domestic use for the second year in a row, he said.

Kasaeizadeh said Iran had spent about $370 million to upgrade refined oil products and related services and would budget another $300 million for it this year.

He said a $500 million project would be tendered soon to upgrade the Abadan refinery, one of Iran's oldest. Another project, worth $40 billion, seeks to upgrade the refinery at the Gulf port of Bandar Abbas.

http://www.arabia.com/article/0,1690,Business|27446,00.html

-- Martin Thompson (mthom1927@aol.com), August 22, 2000

Answers

The biggest oil producers are running out of oil? Holy Toledo!

-- K (infosurf@yahoo.com), August 23, 2000.