Rationing Fuels Discontent In Iran

By Ali Akbar Dareini
Associated Press
Sunday, July 1, 2007

TEHRAN, June 30 -- President Mahmoud Ahmadinejad, who swept to power promising that every family would benefit from the nation's oil wealth, now faces growing domestic discontent over newly imposed fuel rationing and skyrocketing consumer prices.

The anger at home is an unwelcome challenge for a president who also is fending off international criticism over his country's nuclear program.

Analysts said the fuel rationing, imposed this week, may be an attempt to reduce Iran's dependence on foreign gasoline imports that Western governments could eventually use to pressure Tehran.

A month after raising gasoline prices by 25 percent, the government began fuel rationing Wednesday, which sparked violence in Tehran. Angry Iranians smashed shop windows and set fire to a dozen gas stations.

With armed guards protecting gas stations Thursday, calm returned to the capital as motorists lined up to fill their tanks. But many were still seething.

"Ahmadinejad promised paradise, but his government has made life hell for Iranians," Mohsen Nosrati said as he waited at a gas station in central Tehran.

Ahmadinejad portrayed himself as a champion of the poor when he swept to power in 2005, pledging to use the country's oil wealth to eradicate poverty and tackle unemployment.

But joblessness remains high amid surging inflation. The government estimates unemployment at 10 percent, although economists say it could be as high as 30 percent.

Even before the rationing, Ahmadinejad faced growing criticism -- even from conservatives who once supported him -- for dramatically raising housing and food prices over the past year. Prices for fruits and vegetables have tripled in the past six months, and housing prices have more than doubled since last summer.

Many fear that the boost in fuel costs will worsen inflation, which the Central Bank says is 14 percent but which economists say is at about 25 percent.

Conservatives in Iran's parliament, especially those aligned with the national oil company, have long pushed for higher gasoline prices. Still, Ahmadinejad resisted the idea because of his campaign promise to share Iran's oil wealth with the poor.

This month, about 60 economists wrote to Ahmadinejad blaming rising prices on his mismanagement and flawed economic policies.

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