Iranian motorists queue amid gasoline confusion

By Staff
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TEHRAN, May 21 (Reuters) Iranian motorists queued at some pump stations to buy cheap gasoline before planned rationing and price hikes, but officials cast doubt today that the full scheme would come into force as announced on May 22.

The government and lawmakers have given conflicting signals in recent days about whether the plan to limit the sale of heavily-subsidised fuel and increase the price by 25 per cent will be implemented from tomorrow or at a later date.

Iran imports 40 per cent of its gasoline needs because of a lack of refining capacity. Subsidies for some of the cheapest fuel in the world are draining the state coffers of OPEC's second largest crude producer.

The government says its plan will help reduce Iran's heavy reliance on expensive imports, particularly when Tehran faces further United Nations sanctions over its disputed atomic programme.

But officials indicated that at least the rationing part could be delayed, while it was unclear whether the price would increase in line with the timetable.

''The price of gasoline (from May 22) is not yet clear and finalised,'' Deputy Oil Minister Mohammad Reza Nematzadeh told the semi-official Fars News Agency. ''The definite price of gasoline will be announced by the president.'' Analysts say President Mahmoud Ahmadinejad's government, which draws backing from Iran's poor, could get cold feet because the plan may stoke inflation, running at 17 per cent.

Past fuel price rises have quickly pushed up other costs.

''I don't understand why they are causing such confusion for the people,'' one taxi driver in the capital complained. ''No one knows how much the gasoline will cost and how much we will receive per month. They don't know themselves.'' CROWDED PETROL STATIONS Ahmadinejad has hinted the scheme may be postponed following reports of technical hitches in distributing the electronic smart cards motorists will use to buy subsidised fuel.

Some Iranians have not received them and state radio said the government said rationing would not start until everybody had one. It has yet to say how much fuel drivers will get.

Fars highlighted the confusion in a report citing two government officials, one of them saying the price will rise to 1,000 rials (about 11 US cents) tomorrow and the other saying it would remain at 800 rials.

''Publishing contradictory reports over the price of gasoline may cause corruption ... and misuse by some station owners is possible,'' it said.

State radio reported queues for fuel of up to two kilometres in some parts of Tehran late yesterday. ''Petrol stations were more crowded last night than before,'' it said. However, there were no signs of queues on Monday morning, witnesses said.

Economists say the subsidies encourage waste, hurt the environment and burden the budget. Iran last year spent 5 billion dollars on gasoline imports, but many Iranians regard abundant and cheap gasoline as a national right.

World powers have imposed sanctions on Iran for refusing to rein in its nuclear work, which they suspect is aimed at making atom bombs. The United States has said Iran's dependency on fuel imports gave Washington ''leverage''.

REUTERS SKB KP1639

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