Iran Guzzles Gas at Its Own Cost

An Oil Ministry mural reads,
An Oil Ministry mural reads, "Oil resources are exhaustible. Let's consume correctly with a view to the future." (2000 Photo By Hasan Sarbakhshian -- Associated Press)
By Karl Vick
Washington Post Foreign Service
Monday, July 4, 2005

TEHRAN -- At Station No. 11, where the afternoon air is a thick bouquet of the unleaded that drips, splashes and pools from the tanks of motorists hastening to fill up, a looming billboard reminds Iranians of a truth easily overlooked in this land of 40 cents a gallon, guaranteed: Gas costs money.

"A waste of national wealth," reads the caption on the giant cartoon posted at service stations across Iran, a public service announcement showing a distracted motorist absently keeping the pressure on the trigger as the nozzle moves from pump to tank. The gasoline puddling on the ground is drawn like dollar bills fluttering from an open spout.

"People can't understand how valuable petrol is," said Ebrahim Mirzaei, an attendant at the government-run service station in south Tehran, where a steady stream of motorists lined up at a half-dozen pumps for fixed-price, heavily subsidized fuel. "It's so cheap, people don't care."

As gas prices at U.S. stations hover above $2 a gallon -- approaching the recent historic highs that polls show many Americans rank as a truly grave concern, above the war in Iraq -- the scene at Station No. 11 gave fresh meaning to the phrase "oil-rich Middle East."

"It's full!" Mirzaei hollered at a man heaving his weight on and off the rear of his pickup truck, apparently trying to force air out of the tank he had just topped off, but mostly sloshing gasoline onto the pavement. "Why are you shaking it?"

Wealth is relative, however. The pump beside the pickup read 22 liters, nearly six gallons. The price: 17,600 rials, or $2. That's 30 cents shy of what Rassoul Kariman, another attendant, said he earns in an eight-hour shift darting among the pumps.

"Cheap?" he said, "Very expensive, for me."

His may be a paltry income even in a country with a per capita income of $2,000. But it goes a long way toward explaining why Iran's government spends billions artificially holding down the price of gasoline.

Especially in an election year.

"Every time we have an election, they freeze the price," said Siamak Namazi, managing director of Atieh Bahar Consulting, a Tehran firm that explains Iran's heavily centralized, extremely opaque economy to potential foreign investors. "And we do have quite a few elections."

Last year, it was a freshly elected parliament that voted to forgo a scheduled 20 percent rise in gasoline prices, locking in place the 2004 price instead.

Last month, Iranians swept into the presidency Mahmoud Ahmadinejad, a hard-liner who campaigned as a humble public servant painfully aware of the economic plight of ordinary people. Having promised to hike payouts to the poor, the newly married and the retired, he appears unlikely to subject Iranians to the brutal realities of a world petroleum market where oil prices last week hit $60 a barrel.

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