Ahmadinejad faces backlash over plans for petrol rationing

Iran is to introduce petrol rationing in two weeks in a move that belies its status as the world’s fourth-largest oil exporter and threatens to trigger a popular backlash against its president, Mahmoud Ahmadinejad.

The country’s motorists – used to some of the cheapest fuel in the world – will be restricted to three litres a day under a scheme to cut fuel consumption and reduce the burden on Iran’s struggling economy of providing subsidised petrol.
The population is already restive over rising prices amid an inflation rate estimated at 20% to 30%. It also contradicts Mr Ahmadinejad’s pre-election promise to reduce poverty and bring Iran’s oil wealth to “people’s tables”.

But the country has a large budget deficit caused by fuel subsidies and there are fears that rising demand could exhaust Iran’s oil-exporting capacity within 15 years. The ration plan, earmarked for June 7, was to start this week but was delayed amid difficulties in smart card technology at filling stations. Worries over political consequences have prompted speculation that it may be postponed indefinitely.

However, the government had already upset motorists by announcing on Tuesday that a litre of petrol would go up by 1p to 5p. While tiny by western standards, the rise is controversial in a country where cheap fuel is taken for granted.

Under rationing, things will get tougher. Kamal Daneshyar, head of parliament’s energy committee, said drivers would pay 20p a litre for petrol above their quota.

A Tehran-based analyst, who requested anonymity, predicted that rationing would trigger more inflation. But he added: “This country can’t go on consuming and wasting the amount of fuel that it does. It is one of the top three per capita users of energy in the world. Keep going at that rate and we will end up consuming all the hydrocarbons we produce. It has great strategic implications for Iran as an energy exporter.”

Guardian