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Iran delays petrol rationing

Oil-rich Iran is to delay a plan, scheduled to be implemented today, to ration petrol and raise pump prices that is expected to have a profound impact on its economy, officials said.

Iran has been unable to distribute sufficient rationing cards in time to consumers to execute the plan, which aims to reduce the colossal burden on the budget of subsidizing the country’s frenzied petrol consumption. „From May 22, petrol will be distributed only on production of rationing cards, but at the same price, 800 rials a liter ($0.08),” said Mohammad Jafar Behdad from the presidential press office.

The plan takes a two-pronged approach to the problem by slightly raising petrol prices that are less than a comparable amount of mineral water and imposing a rationing system. Under the rationing system, consumers will have to pay a higher price for any petrol they consume above a certain quota. But the government has yet to give any indication over the level of the quota or the higher price.

Jafar Behdad also did not say when the plan, which was approved by Iran’s conservative parliament earlier this year, would now be implemented. The lavish consumption by Iranian drivers forces the OPEC oil cartels number two producer to import billions of dollars of extra petrol annually, with the sum reaching more than $4 billion in the last Iranian year.

There is a consensus in Iran that this burden on the budget cannot continue but the government is also aware that Iranians have become very used over the years to unlimited cheap petrol. The use of the rationing cards has been made obligatory at certain petrol stations over the past few weeks, giving rise to long queues with drivers puzzled over the new technology. (petrolplaza.com)