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Gasoline consumption in Iran rose 3.6 percent in the second week of August compared with the previous week, Iranian media said recently, indicating a limited rebound following an initial dip after rationing was introduced in June.
The figures from the Iranian oil distribution company, cited by the Hamshahri daily, appeared to back up anecdotal evidence that traffic in the capital Tehran has increased after a visible easing. It did not give a reason for the rise in fuel use.
But the statistics still showed a clear fall in overall demand, to about 61 million litres per day, from before the scheme was introduced on June 27, when Iranians on average used roughly 75 million litres, of which about 40 percent was imported. One Iranian oil official has said the government aims to cut consumption to about 60 million litres per day.
Iran is the world's fourth-largest oil producer but lacks refining capacity and must import large quantities of gasoline to cover its needs. All gasoline, whether imported or not, is sold at heavily subsidised prices, weighing on state coffers.
Iran is keen to reduce fuel imports as it faces US-led efforts to isolate Tehran over its disputed nuclear programme. An oil ministry official last week said Iran's gasoline imports would more than halve to 15 million litres per day due to rationing.
Many Iranians, used to cheap and abundant fuel, complain the monthly quota of 100 litres of subsidised gasoline for private drivers is not enough and have called for more fuel to be made available, even at a higher price.
Government officials have said this risks stoking inflation, already in double-digits. A deputy oil minister last week appeared to suggest Iran may start selling so-called "free gasoline" at a higher price but later said his comments were misunderstood. "The government and decision makers have no plans to give free market price gasoline for the public," Mohammad Reza Nematzadeh told state television on Sunday evening.
The International Energy Agency on Friday said Iran's gasoline rationing has done little to tame demand because prices are still very low and drivers can dodge restrictions by buying six months' allocation in advance.

Copyright Reuters, 2007

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