Iran to ration gasoline from Wednesday -state TV

TEHRAN, June 26 (Reuters) Iran, the No. 2 OPEC crude producer, will introduce gasoline rationing for motorists from Wednesday, state television reported, in a bid to rein in fuel imports amid concerns over possible harsher U.N. sanctions.

Despite its huge energy reserves, Iran lacks refining capacity and must import about 40 percent of its gasoline, a sensitive issue when world powers have threatened new penalties in a row with Tehran over its nuclear programme.

Imports also are a big burden on state coffers because all fuel, whether imported or domestically produced, is sold at heavily subsidised prices. Even after this year's 25 percent price hike, fuel still sells at just 1,000 rials (11 U.S.

cents) a litre, some of the cheapest in the world.

''From midnight tonight, gasoline will be rationed,'' state TV said late on Tuesday, quoting an Oil Ministry statement.

The announcement surprised many drivers, prompting a race to fuel stations to beat the deadline. Lines of cars stretched along main roads and down side alleys.

''I have no fuel left in my car. But what can I do?'' said Javad Shahedpour, stuck in a queue hundreds of metres (yards) from the pumps of one Tehran gasoline station.

Some Iranians -- long used to cheap, abundant fuel -- walked away from pumps lugging jerry cans of gasoline.

Even before rationing started, there were reports of scuffles at fuel stations as frustrated drivers stocked up.

Oil traders, who have watched the rationing debate closely, said ahead of the news they saw no sign Iran would cut imports even if rationing went ahead. Iran consumes 75 million or more litres a day, a figure that has been rising at 10 percent a year, pushing up import needs.

Parliament and government have debated whether any rationing plan should allow drivers to buy extra fuel at market prices. Tuesday's announcement made no mention of that.

'SMART' CARDS ''The government, by being completely committed to implementing the law, will exert all its efforts to decrease any possible limitations for people,'' state television said.

Some cars in Iran can burn both gasoline and compressed natural gas, and those would receive a smaller gasoline ration.

The announcement said private cars, which cannot burn both types of fuel, would get 100 litres of gasoline per month.

For the time being, private drivers would be able to buy their daily allocation up to four months in advance, it said, adding that this period could later be extended to six months.

Official taxis, which only consume gasoline, would get 800 litres per month, while other drivers who work as part-time taxis will get 600 litres per month, state television said.

Government cars, which have been rationed from earlier this month, will get 300 litres per month.

All gasoline is already sold using electronic ''smart'' cards, but some drivers have not received the cards. Officials say smart cards will reduce the possibility of a black market in fuel but analysts say such a trade is almost inevitable.

Heavy subsidies in Iran have encouraged waste and smuggling to neighbouring countries that do not have such cheap fuel prices.

This year's budget to March 2008 allocated TEHRAN, June 26 (Reuters) Iran, the No. 2 OPEC crude producer, will introduce gasoline rationing for motorists from Wednesday, state television reported, in a bid to rein in fuel imports amid concerns over possible harsher U.N. sanctions.

Despite its huge energy reserves, Iran lacks refining capacity and must import about 40 percent of its gasoline, a sensitive issue when world powers have threatened new penalties in a row with Tehran over its nuclear programme.

Imports also are a big burden on state coffers because all fuel, whether imported or domestically produced, is sold at heavily subsidised prices. Even after this year's 25 percent price hike, fuel still sells at just 1,000 rials (11 U.S.

cents) a litre, some of the cheapest in the world.

''From midnight tonight, gasoline will be rationed,'' state TV said late on Tuesday, quoting an Oil Ministry statement.

The announcement surprised many drivers, prompting a race to fuel stations to beat the deadline. Lines of cars stretched along main roads and down side alleys.

''I have no fuel left in my car. But what can I do?'' said Javad Shahedpour, stuck in a queue hundreds of metres (yards) from the pumps of one Tehran gasoline station.

Some Iranians -- long used to cheap, abundant fuel -- walked away from pumps lugging jerry cans of gasoline.

Even before rationing started, there were reports of scuffles at fuel stations as frustrated drivers stocked up.

Oil traders, who have watched the rationing debate closely, said ahead of the news they saw no sign Iran would cut imports even if rationing went ahead. Iran consumes 75 million or more litres a day, a figure that has been rising at 10 percent a year, pushing up import needs.

Parliament and government have debated whether any rationing plan should allow drivers to buy extra fuel at market prices. Tuesday's announcement made no mention of that.

'SMART' CARDS ''The government, by being completely committed to implementing the law, will exert all its efforts to decrease any possible limitations for people,'' state television said.

Some cars in Iran can burn both gasoline and compressed natural gas, and those would receive a smaller gasoline ration.

The announcement said private cars, which cannot burn both types of fuel, would get 100 litres of gasoline per month.

For the time being, private drivers would be able to buy their daily allocation up to four months in advance, it said, adding that this period could later be extended to six months.

Official taxis, which only consume gasoline, would get 800 litres per month, while other drivers who work as part-time taxis will get 600 litres per month, state television said.

Government cars, which have been rationed from earlier this month, will get 300 litres per month.

All gasoline is already sold using electronic ''smart'' cards, but some drivers have not received the cards. Officials say smart cards will reduce the possibility of a black market in fuel but analysts say such a trade is almost inevitable.

Heavy subsidies in Iran have encouraged waste and smuggling to neighbouring countries that do not have such cheap fuel prices.

This year's budget to March 2008 allocated $2.5 billion for gasoline imports but officials had said Iran would spend that amount by August. The government spent $5 billion last year, double what it planned, and had to ask parliament for extra cash.

The United States, which is leading efforts to isolate Iran over its nuclear 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.

REUTERS SRS VP0120 .5 billion for gasoline imports but officials had said Iran would spend that amount by August. The government spent billion last year, double what it planned, and had to ask parliament for extra cash.

The United States, which is leading efforts to isolate Iran over its nuclear 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.

REUTERS SRS VP0120