February 12, 2007

GASOLINE IS THE NEW BREAD:

An excess of problems for Iranian energy: Fall in oil production may lead to gasoline shortfall and protests (Jad Mouawad, February 12, 2007, International Herald Tribune)

Political and economic pressure from the United States and other Western governments has chilled foreign investment in Iran and is squeezing the long-fragile Iranian energy industry, a problem that is in many ways at the heart of the nuclear controversy involving Iran. [...]

Each year, it has to find ways to make up for production declines that can range from 200,000 to 500,000 barrels a day, out of a total current output of less than 4 million barrels a day. Moreover, its refining capacity lags far behind its domestic needs, so the country is forced to import 40 percent of its gasoline.

And to appease a population historically prone to unrest, it spends about $20 billion each year, or 15 percent of its economic output, to keep consumer prices low for gasoline, natural gas, electricity and other energy products, according to the International Monetary Fund and other estimates.

Those subsidies -- the price at the pump is a mere 35 cents a gallon, or less than 10 cents a liter, one of the lowest in the world -- have prompted double-digit growth in consumption in this country of 70 million people. To curb runaway demand, the government plans to begin rationing gasoline in March, a measure so unpopular, and potentially so explosive, that rationing plans have been put off several times in the past.


Nevermind not making it until the end of the year, Mahmoud may not make it to Summer.


MORE:
Iran warms to nuclear talks: President makes shocking reversal, but still won't halt enrichment program (DOUG SAUNDERS, 2/12/07, Globe and Mail)

President Mahmoud Ahmadinejad surprised a huge crowd in Iran's capital yesterday by skipping an expected announcement of a nuclear escalation and declaring instead that he intends to co-operate with international bodies seeking to prevent Tehran from developing atomic weapons. [...]

As he was speaking, an even more dramatic reconciliation was being made by Ali Larijani, the secretary of Iran's National Security Council and a representative of Ayatollah Khamenei, during talks in Munich.

"The political will of Iran is aimed at a negotiated settlement of the case. We don't want to aggravate the situation in the region," Mr. Larijani told delegates at a security conference.

He also offered a surprising statement of reconciliation with Israel. "We are posing no threat to Israel. We have no intention of aggression against any country," several wire services reported him saying. The remarks did not appear in Iranian accounts of his speech. They would represent a significant retreat from hostile remarks about Israel that have long been customary from Iranian leaders but have become much more pronounced under Mr. Ahmadinejad, who has repeatedly hinted that Israel should not exist and has played host to a Tehran conference of anti-Semites and Holocaust deniers.

Posted by Orrin Judd at February 12, 2007 5:31 PM
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