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Sun 17 Feb 2008 02:50 AM

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Iran approves $3bn fuel import budget

MPs agree spending plan for diesel and petrol imports to meet high consumer demand.

Iran's parliament on Saturday approved a three-billion-dollar spending plan to fund diesel and petrol imports during the next Iranian year, the official IRNA news agency reported.

MPs approved a budget allowing imports worth up to 30 trillion rials (3.2 billion dollars) in the new year beginning on March 20.

Iran has become a net importer of diesel and petrol because of high consumer demand, partly because it spends around 100 billion dollars (68 billion euros) a year subsidising fuel prices.

Unleaded petrol in Iran currently costs around 1,000 rials (10 dollar cents) a litre.

Iran, Opec’s number two oil producer, makes around 45 million litres (12 million gallons) of petrol a day but has previously been forced to import up to 25 million litres (6 million gallons) extra every day to meet demand.

The government introduced fuel rationing in June in a bid to dampen demand, and since December drivers have been limited to buying 120 litres (26 gallons) of petrol a month.

This has cut consumption, and the country is currently importing around 15 million litres (4 million gallons) a day.

Smugglers also illegally export diesel and petrol to neighbouring Iraq, Turkey and Pakistan, where it is sold for a profit.

MPs are also considering a dual pricing system under which non-rationed petrol could be sold alongside rationed subsidised fuel, the ISNA student news agency said.

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