How did oil power Iran fall into a petrol crisis?

Despite being OPEC’s second biggest exporter, Iran needs to import some 40 percent of the 70 million litres of gasoline it burns each day owing to a lack of refinery capacity.

Parliament has forced action in the year to March 2007, slashing the budget for petrol imports. This should mean the government will either have to ration or raise prices — both politically inflamatory moves that could stir unrest.

Interior Minister Mostafa Pourmohammadi and Oil Minister Kazem Vaziri-Hamaneh say the government favours stopping imports and introducing rationing, fearing that price hikes could stoke inflation already running at 12.1 percent.
Iran’s troubles are rooted in the different priorities of populist governments with short-term agendas and oil officials.

The oil ministry and state oil company, which have advocated building refineries, cannot get access to a slice of the budget.

“Economic decisions are contaminated with populist policies. Within the last 40 years the issue has grown more severe every year and no government has actually had the will to solve it,” said independent economic analyst Saeed Leylaz.

“The oil ministry has never been given the appropriate budget,” he added.

Persian Journal