Iran aims to end gasoline rationing by March 2009

TEHRAN (Reuters) - Iran aims to end gasoline rationing by March 2009 through expanding domestic production of fuel and encouraging the use of vehicles powered by natural gas, an Iranian oil official said on Monday.

Iran, the world's fourth-largest crude producer, introduced rationing in June to curb fuel consumption that was far outstripping domestic output and to reduce costly gasoline imports.

"Probably by the end of the coming Iranian year, rationing will end. We are trying to control consumption from one side and increase production from the other side," Deputy Oil Minister Mohammad Reza Nematzadeh told reporters at an energy conference.

The current Iranian year ends in March 2008 and the next one ends in March 2009. Nematzadeh said he was basing the timetable on an announcement by President Mahmoud Ahmadinejad.

As well as expanding refining capacity, Nematzadeh said the government was seeking to introduce more cars that run on compressed natural gas (CNG) and to set up more stations selling CNG, which car drivers using the fuel complain are now too few.

The head of the National Iranian Gas Company, Reza Kasaizadeh, also said the number of CNG fuel stations was insufficient, adding there should be one for each 1,000 vehicles.

"So we need to increase the number of stations and also improve the capacity of some of the current active stations," Kasaizadeh, who is also a deputy oil minister, told reporters at the same conference.

Ahmadinejad had ordered the gas company to reach 1,800 such fuel stations by March 2009, he said, adding it planned to set up 500 this Iranian year, of which more than 300 had already been built. He did not say how many Iran had now.

Nematzadeh, head of the National Iranian Oil Refining and Distribution Company, said about 24 million liters per day of gasoline had been saved in the past six months. Before rationing began, consumption was around 75 million liters per day or more.

He said consumption could edge up again in the next year but the government was seeking to respond by boosting gasoline production.

He did not give reasons for any rise in consumption but Oil Minister Gholamhossein Nozari said the government was finalizing a plan to increase the monthly fuel quota for private cars to 120 liters from later this month, up from 100 liters.

All gasoline in Iran -- whether produced locally or imported -- is sold at the heavily subsidized price of 1,000 rials (about 11 U.S. cents) a liter. This has created a drain on state coffers.

Importing gasoline is also a sensitive issue when the country is facing calls from the United States for more U.N. sanctions over Tehran's disputed nuclear program.

(Reporting by Fredrik Dahl; Writing by Edmund Blair; Editing by James Jukwey)