Iran says to decide next week on gasoline rationing

TEHRAN, June 21 (Reuters) Iran will decide next week on when to launch its delayed gasoline rationing plan, Oil Minister Kazem Vaziri-Hamaneh said today, two days after a lawmaker said the scheme would not take effect until late July.

The minister's comments came after reports over the past week of Iranians stocking up on gasoline and fights breaking out among some queuing motorists amid uncertainty over when rationing would start.

OPEC's second-largest oil exporter, Iran lacks refining capacity to meet domestic fuel demand of 75 million litres or more a day.

Heavy subsidies which drain state coffers make fuel so cheap it encourages waste, analysts say.

''In order to make sure that citizens will not have problems if we announce rationing, it was decided that during next week, the final reports by the technical committee be presented and the final decision for the timing of rationing be taken,'' Vaziri-Hamaneh told state television.

The Islamic state imports 40 per cent of the fuel it consumes, potentially making it vulnerable if further sanctions were imposed by world powers in their row with Tehran over Iran's nuclear programme.

Seeking to rein in soaring demand, Iran on May 22 raised the gasoline price by 25 per cent to 1,000 rials (around 11 US cents) per litre, still among the cheapest in the world, but it delayed until June a scheme to also ration the fuel.

A lawmaker was quoted as saying on Tuesday that the rationing plan would be delayed further, until the beginning of the Iranian month that starts on July 23.

The first phase of gasoline rationing started last Thursday, limiting fuel that drivers of government cars can buy. Ordinary Iranians still do not know when the full plan will be implemented and what their quota of subsidised fuel will be.

Drivers must also produce electronic ''smart'' cards to buy any fuel, and there have been media reports of problems in their distribution.

The United States, which is leading efforts to isolate Iran over its atomic plans, has said Iran's gasoline imports are a point of ''leverage.'' Washington accuses Iran of seeking to build nuclear weapons, a charge Tehran denies.

Seeking to reduce its dependency on imported fuels, Iran also aims to boost its own production capacity, even though analysts say sanctions and insufficient funding are thwarting its plans to nearly double domestic oil refinery capacity.

Vaziri-Hamaneh, referring to an ongoing investment programme, said domestic production of gasoline would sharply increase, without specifying the time period.

''With the investments for developing the existing refineries and by building new refineries, the capacity to produce gasoline in the country will reach 3 million barrels per day,'' he said.

Reuters DS DB2054