Iran to ration gasoline, drivers race to the pumps

By Edmund Blair

TEHRAN (Reuters) - Iran said it would introduce gasoline rationing on Wednesday to wean the No. 2 OPEC crude producer off costly fuel imports but the move sparked angry scenes in the capital where one fuel station was set alight.

Despite its huge energy reserves, Iran lacks refining capacity and must import about 40 percent of its gasoline, a sensitive issue when world powers have threatened fresh U.N. sanctions in a row with Tehran over its nuclear program.

Flames rose from a fuel station in Pounak, a poorer area of Tehran, set alight in angry scenes after drivers rushed to get fuel before a midnight deadline for rationing, witnesses said.

"Guns, fireworks, tanks, (President Mahmoud) Ahmadinejad should be killed," angry youths chanted as they hurled stones, one witness at the scene said. Another witness said riot police were in the area trying to disperse the crowd.

Cars stretched along main streets and down side alleys at other gasoline stations throughout the capital after months of uncertainty about when or if rationing would be implemented.

Even before rationing started, there were reports of scuffles at fuel stations as frustrated drivers stocked up.

"From midnight tonight, gasoline will be rationed," state television said late on Tuesday, quoting an Oil Ministry statement.

Some queuing drivers -- long used to cheap, abundant fuel -- grumbled about the government of Ahmadinejad, who vowed to share out Iran's oil wealth more fairly but whose policies, critics say, have stoked inflation.

Imports are a big burden on state coffers because all fuel, whether imported or domestically produced, is sold at heavily subsidized prices. Even after this year's 25 percent price hike, fuel still sells at just 1,000 rials (11 U.S. cents) a liter, some of the cheapest in the world.

Oil traders said before the news they saw no sign Iran would cut imports even if rationing went ahead. Iran consumes 75 million or more liters a day, a figure that has been rising at 10 percent a year, pushing up import needs.

'SMART' CARDS

Private cars will get 100 liters of gasoline a month but less if they also burn compressed natural gas, state TV said. Drivers have complained that the amount is too little. For the time being, private drivers would be able to buy their daily allocation up to four months in advance, it said, adding that this period could later be extended to six months.

Parliament and government had debated whether any rationing plan would allow drivers to buy extra fuel at market prices. Tuesday's announcement made no mention of that.

Oil Minister Kazem Vaziri-Hamaneh urged Iranians not to worry about the impact of rationing.

"When you have gasoline for four to six months, its management is in your hands and you have the choice not to consume it," he said on a television discussion program.