Iran needs billions more dollars for petrol imports

Oct 15, 2007 02:00 AM

Iran needs to request an extra $ 2 bn to import petrol after its original budget allocation ran out halfway through the year. The shortfall comes despite a rationing plan imposed in June that aimed to curb Iran's massive imports of refined oil products made necessary by its frenzied consumption and lack of refineries.
"For imports of petrol and diesel in the second half of this year, we have asked [the oil ministry] for $ 2.3 bn," the managing director of National Iranian Oil Products Distribution Company, Nouredin Shahnazi Zadeh, was quoted as saying.

Some $ 1.5 bn of that figure is needed for petrol and $ 830 mm for gas oil, he explained. He added that rising global market prices had already meant the budget for imports of petrol for the Iranian year to March 2008 had been exhausted.
The budget allowance had been set by parliament at $ 2.5 bn, and the government will now need to ask parliament for the extra allowance to last the rest of the year.

Iran is the world's fourth largest oil producer, but its lack of refineries and colossal consumption encouraged by a heavy state subsidy on fuels means it must import 40 % of its petrol requirements. But Shahnazi Zadeh argued the rationing was having a serious effect on consumption.
"The rationing plan resulted in a 22.5 % decrease in petrol consumption compared to the same period last year."

He put Iran's average petrol consumption at 60 mm litres (15.9 mm gallons) a day since the implementation of the rationing plan June 22, and said that the domestic refineries would produce close to 46 mm litres a day.
The state subsidy for petrol alone amounted to about $ 5.8 bn in the first six months of the year (March to September), Shahnazi Zadeh said. The total subsidy, so far, paid this year on the main fuels derived from crude oil is $ 17 bn, which would double by the end of the year, he said.

Source / AFP
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