Iranian MPs Give Nod to Further Petrol Imports

TEHRAN (Fars News Agency)- Iranian parliament gave tentative approval for the spending of an extra $2 bln and 200 mln on petrol imports but warned fuel rationing might be necessary.

The MPs approved a draft proposal by the planning and budget commission to spend $2.2 bln until the end of the Iranian year in March 2007 on petrol imports, slashing back the $3.5 bln requested by government that would have obviated the need to ration fuel.

With 158 votes from 227 present MPs, the general outlines of the petrol bill was approved while the details of the bill will be discussed one by one.

Iran may be OPEC’s number two producer of oil, but its refineries have a capacity of only 42 mln liters of petrol a day in a country where demand stands at more than 70 mln liters daily.

In February, parliament approved a 2.5 bln dollar budget for petrol imports which ran out by late September due to higher oil prices, rising consumption and the smuggling out of the country of millions of liters of petrol every month.

The head of parliament energy commission, Kamal Daneshyar, said lawmakers would on Wednesday discuss a new distribution mechanism for petrol.

“We have only three options to deal with petrol. One way is to ration it, the other way is to … sell it at 3,000 Rial (33 US cents) per liter or at 5,000 Rials (almost half a dollar) per liter,” Daneshyar said.

MPs mooted fuel rationing with effect from December 22.

Some deputies voiced concern about the negative impact of spending money on fuel which is lavishly consumed in the Islamic republic, warning this could upset economic development.

Other lawmakers said rationing could lead to corruption.

“With approval of the bill, we ruin the country’s self-sufficiency plans and harm national interests with regard to economic development,” said Reza Talai Nik, MP from Bahar and Kaboudar Ahang.

A liter of regular petrol costs just 800 Rials (nine US cents, or 34 cents a gallon). Super costs 1,100 Rials (12 cents, or 45 cents a gallon).

Talai Nik said the bill was contrary to President Mahmoud Ahmadinejad’s pledge to remove the gap between the rich and the poor.

“Why this huge subsidy should be paid for the rich in big cities who own a couple of cars for each family while we have people in villages who have no car to use the subsidized fuel,” he said.

In his electoral campaign of June 2005, Iranian President Mahmoud Ahmadinejad pledged to bring “oil money onto people tables” and “spread justice”.

The head of Management and Planning Organization, Farhad Rahbar, supported the 3.5-bln fuel bill as proposed by government.

“If we cut the imports from the current consumption rate, we (would have to) ask people to reduce their consumption by 50% and use substitute transportation vehicles which are not ready today,” he said.

“Hopefully, we may be ready for rationing in 2007,” he said.