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Rationing Fuels Discontent In Iran
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"Ahmadinejad promised to improve our living conditions, but he has brought us misery and poverty," said Hamid Reza Shokouhi, an Iranian analyst.
Many experts blame the worsening economy on two sets of U.N. sanctions imposed since December in response to Iran's refusal to halt uranium enrichment.
On Friday, diplomats said the United States and its allies were awaiting an Iranian response to a proposal that would commit the U.N. Security Council to hold off on additional sanctions if Tehran stops further development of its enrichment program.
Iran says it is developing its nuclear program to generate electricity to meet growing energy needs. But the United States and its allies accuse it of seeking to secretly develop nuclear weapons, a charge Tehran denies.
The international pressure has made it difficult to tackle one of the country's most significant economic problems -- gasoline subsidies that cost the government billions of dollars a year and encourage high demand.
Iran is one of the world's biggest oil producers, but it does not have enough refineries, so it must import more than 50 percent of the gasoline consumed domestically. The rationing is part of a government attempt to reduce the $10 billion it spends each year to import fuel that is then sold at below cost to keep prices low.
The government tried to curb demand and related subsidy expenditures by raising the price of gasoline in May, but the increase was not enough to significantly curb consumption. After the May price increase, gas sells at the equivalent of 38 cents a gallon.
The rationing system allows private drivers only 26 gallons of fuel a month at the subsidized price. Taxis get 211 gallons a month. Anything more than that will be sold at a higher price yet to be announced.
