Drivers riot as oil-rich Iran rations petrol

Iranian motorists set light to petrol stations across Tehran yesterday after the Government imposed fuel rationing with just three hours’ notice.

The protests marked the first outpouring of anger since Mahmoud Ahmadinejad, the populist President, was swept to power two years ago promising to put the country’s “oil income on people’s tables”.

In one part of the sprawling capital of 12 million, angry youths pelted police with stones and chanted: “Guns, fireworks, tanks, Ahmadinejad should be killed.”

“This man, Ahmadinejad, has damaged all things,” said Reza Khorrami, a 27-year-old teacher, as he queued for fuel at a petrol station guarded by baton-wielding police.

The rationing in Iran is the most controversial economic measure since the 1979 Islamic Revolution and spells trouble for the President.

Despite high oil prices on world markets Mr Ahmadinejad, the son of a blacksmith who portrays himself as a champion of the working man, has failed to raise living standards. Inflation has surged and unemployment has increased.

Iran is one of the world’s biggest producers of crude oil but depends heavily on imported petrol because it lacks refining capacity. In addition, petrol is heavily subsidised by the State, selling at 5½p a litre. Even after a recent 25 per cent increase it is the cheapest in the world. Thousands of gallons of petrol have been smuggled to Iran’s neighbours where prices are higher.

The combination of costly imports and high subsidies has left the Government with a huge deficit, crippling public services. Last year the Iranian parliament allocated $2.5 billion (£1.25billion) for petrol imports but spent a total of $5 billion.

The regime will be concerned that yesterday’s spontaneous unrest could serve as a catalyst for wider protests over a host of other economic, political and social grievances.

Mr Ahmadinejad’s Government is in the middle of one of the most ferocious crackdowns on dissent in years. Since April thousands of young Iranians have been detained for “immoral behaviour” as the Islamic dress code is enforced.

There has also been a campaign to purge universities of liberal ideas in what some analysts have described as a second cultural revolution. The regime’s recent strong-arm tactics should help to contain unrest over petrol rationing. Gary Sick, an Iran expert at Columbia University in New York, said: “They [the regime] know opposition is there and they’ve prepared the way, to minimise the chance of a backlash.”

Under rationing, owners of private cars can buy 100 litres of petrol a month at the subsidised price of 1,000 riyals (5½p) a litre.

But the daily quota of just over three litres is a paltry amount in a city as huge as Tehran which has poor public transport. Rationing is to continue for four months and may be extended, the Government said.

Taxis will be allowed 800 litres a month at the subsidised price. It is expected that motorists will be able to buy petrol above their ration at more realistic prices. All petrol is sold using electronic “smart” cards, but some drivers have not received them.

Demand for petrol in Iran is growing by 11 per cent a year, compounded by a huge boom in car sales and wastefulness encourgaged by low prices. Iran’s 8.5 million cars, many of them fuel-inefficient Peykans, which are based on the extinct and inefficient British Hillman Hunter, consume around the same amount of petrol as the 35 million cars on British roads.

Wealth gap

£1,300: Iran’s GDP per capita

15%: Iran’s unemployment rate 4m number of barrels of oil produced by Iran each day

15.8%: Iran’s inflation rate

7m: number of agricultural workers in Iran £52m the amount it receives in aid annually

Source: World Bank, CIA

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