High Gasoline Consumption Debate.

Addressing the same conference, Deputy Oil Minister and President of the National Iranian Oil Refining and Distribution Co. (NIORDC), Mohammad-Reza Nematzadeh, noted that high gasoline consumption in Iran was one of the serious problems the country faced. He said the use of gasoline currently was averaging 11 million tons per day, of which 8 million tons/day are produced domestically and the rest is imported.

Nematzadeh said construction of new refineries and development of the existing ones are among the priorities assumed by Iran to resolve its gasoline shortage. He said that Iran had started extensive co-operation with Indonesia, China, Malaysia, and Singapore in construction of new refineries, adding: "Efforts are being made to convert a great portion of heavy crude [oil] to gasoline". He listed the development and upgrading plans at Isfahan, Tehran, Bandar Abbas, and Arak refineries among the measures so far taken.

Parliament in early November agreed to increase the government's budget for gasoline imports by $2,500m to $5,000m for the year to March 20, 2007. It rejected plants to ration gasoline and, instead, pledged an extra $1,000m for the public transport sector.

Gasoline remains heavily subsidised in Iran, where the retail price is a mere 9 US cents per litre, against domestic production costs of 15 US cents/litre and import costs this year of more than 50 cents/litre. As a result, consumption has risen sharply in recent years. Iranians are estimated to use twice the international average of five litres/day per person. Gasoline smuggling to neighbouring countries adds considerably to the problem.

Officials have proposed gasoline rationing and import restrictions as means of controlling consumption. But such measures are unpopular for a new government under President Mahmoud Ahmadi-Nejad which, since he came to office in August 2005, has been repeatedly promising improvements to the standard of living but failing to deliver.