Iran fuel imports could drop to $4bn

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Iran is expected to import about $4 billion worth of gasoline during the Iranian year ending in March 2008, a senior official said on Monday, suggesting a decline of at least 20% from the previous year.

Officials have said Iran spent $5 billion or more on imports last year. OPEC's second largest producer has been forced to buy fuel from abroad because it cannot refine enough oil at home to meet domestic demand.

A saving of roughly $1 billion, as implied by the comments reported on Monday, would be considerably less than the $3 billion another official last month said Iran was likely to save after introducing gasoline rationing in June.

"We have imported 5 billion litres so far (in the Iranian year that started on March 21) which was worth about $2.9 billion," said Managing Director Noureddin Shahnazi of the National Iranian Oil products Distribution Company.

"If this trend continues we need to import another 2.1 billion litres amounting to $1.1 billion by the end of the year," he was quoted as saying by the oil ministry's web site SHANA.

The two sets of figures indicated total imports this year of $4 billion, or at least $1 billion less than imports last year.

Last year, Iran imported 9.8 billion litres of gasoline, Shahnazi said without specifying the total cost. He said gasoline prices had increased this year.

Hojjatollah Ghanimifard, international affairs director of the state-owned National Iranian Oil Company (NIOC), last month said he expected rationing to save $3 billion this Iranian year, which started in March.

It was not immediately clear whether the figures cited by Ghanimifard and Shahnazi were directly comparable and, if so, why they differed so much. Oil officials were not immediately available for comment.

India, the Netherlands, France and the United Arab Emirates are Iran's primary suppliers.

Total subsidies allocated for gasoline in the first six months of the year were $5.8 billion, Shahnazi said. Both imported fuel and gasoline made in Iran is sold at a heavily subsidised price, equivalent to 11 U.S. cents a litre.

He said average gasoline consumption had declined by 22 percent year-on-year to 60 million litres per day since the rationing was launched in June, citing figures in line with numbers quoted by other officials.

Before rationing was imposed Iranian drivers were using 75 million litres or more a day of gasoline, of which about 36 million were imported.

Shahnazi said daily production of Iran's nine refineries had increased by 3.8% to 47.5 million litres of gasoline, a figure representing almost 80% of average consumption.

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