The mullah-ridden government of Iran, after promising relief for the poor, has been running down the nation's economy so badly in the past two years that the poor--and the students and now the middle class--may be close to revolt. Gas rationing--in a supposedly oil-rich land--is the latest element in the accumulating economic crisis, and this one is sparking active as well as vocal anger on the street. (see International Herald Tribune story below.)
Rationing of oil is probably more unpopular than a simple price increase would have been. This terrible economic idea recalls the proposals for rationing in the USA during the OPEC-induced gas shortages of 1973. I remember thinking at the time that the opponents to the idea should have insisted on "honoring" the politicians who proposed rationing by having ration stamps printed with their pictures on it. That way every driver
sitting and stewing in long gas lines could be reminded right in front of his eyes who brought them this swell policy innovation.
In Iran, "Ahmadinejad stamps" should be printed now. Since the government won't do it, and even is trying to prohibit any media criticism of the new policy, perhaps as an alternative the angry citizenry should print up big posters "thanking" Ahmadinejad and his mullah backers for this new rationing scheme. After all, just as communists in Russia were able to create a shortage of bread in the continent's richest grain producing
region, so now Islamic radicals in power are showing how to create an oil shortage in Iran! That takes talent and should be properly saluted! "Thank You, Dear Leader, For Allowing Us to Enjoy Rationing!"
Meanwhile, I suspect that there are many sober-minded Iranians who are thinking to themselves, "My goodness, if our brave President Mahmoud Ahmadinejad, had not been breaking the country's budget, as well as our international treaties, by building nuclear weapons and supporting terrorists all over the Middle East, maybe he could have built the refineries we need--and now lack--to refine our own oil so we wouldn't have to import it!"
Unrest grows amid gas rationing in Iranhttp://www.iht.com/articles/2007/06/29/africa/29iran-web.php
By Nazila Fathi and Jad Mouawad
Thursday, June 28, 2007
TEHRAN: Unrest spread in Tehran on Thursday, the second day of gasoline
rationing in oil-rich Iran, with drivers lining up for miles, gas stations
being set on fire and state-run banks and business centers coming under
attack.
Dozens were arrested, and the Tehran police chief, Ismail Ahmadi Moghaddam,
complained to reporters that the police had been caught unaware by the
decision to ration fuel.
The anger posed a keen threat to President Mahmoud Ahmadinejad, who was
elected two years ago on a platform of bringing income from oil to the
nation's households. Instead, even though Iran is one of the world's largest
producers of crude oil, it has been forced to import about 40 percent of its
gasoline at an annual cost of $5 billion to make up for shortfalls in its
archaic refining industry.
Some analysts said the decision to ration gasoline was intended to prepare
for the possibility of more United Nations economic sanctions as a result of
concern over Iran's nuclear program.
Iran has defied a demand by the United Nations Security Council to suspend
uranium enrichment activities, and the Council is debating whether to impose
tougher sanctions. Iran contends that its nuclear program is for peaceful
purposes.
"Iran's dependence on imported gasoline has been a focus of international
debate over future sanctions," according to the Eurasia Group, a political
risk consultant. "Rationing will reduce Iran's vulnerability, and Iran's
leadership explicitly mentioned this goal in commenting on the measure," it
said.
Saeed Leylaz, an economist and political analyst in Tehran, said, "The high
gasoline consumption has made Iran very vulnerable, and this is a security
decision now."
"We are importing gasoline from 16 different countries," he said. "The
country would be on the verge of collapse if they suddenly decide not to
sell us gasoline. The government has to find a way to lower the
consumption."
In Washington on Thursday, leaders of a bipartisan House panel, led by
Representative Mark Steven Kirk, Republican of Illinois, and Representative
Robert Andrews, Democrat of New Jersey, proposed legislation intended to
punish any company that provides Iran with gasoline or helps it import
gasoline after Dec. 31. Such a company could lose its access to American
customers through sanctions.
The Iranian government had planned for a year to ration gasoline but had
postponed the move, fearing unrest. Iran offers the highest subsidies for
gasoline in the region, buying foreign gasoline for slightly more than $2 a
gallon, according to official figures, and offering it for 34 cents a
gallon.
"Iran is in a bind," said Vera de Ladoucette, an energy analyst with
Cambridge Energy Research Associates in Paris. "They have acted too late and
too harshly."
According to de Ladoucette, Iran is also seeking to increase its gasoline
production and has outlined plans to spend $18 billion by 2012 to increase
its refining capacity by 1.5 million barrels a day from about 1.6 million.
The government's plan is to build four refineries and expand older ones.
But, she added, it is unlikely to achieve that goal by 2012. "The problem
will be financing all this," she said.
Parliament voted last month to increase the price of gasoline to 64 cents a
gallon. It said that its studies showed that the move would lead to a
decline in the consumption. But Ahmadinejad rejected the proposal and
decided to proceed with rationing.
The price of subsidized gasoline was raised by 25 percent last month. The
new regulation allows private cars 26 gallons of gasoline a month for 34
cents a gallon. Taxis are allowed 211 gallons a month.
Despite a warning to the local news media to avoid reporting the unrest
caused by rationing, newspapers continued to criticize the decision. The
daily Etemad Melli wrote that public transportation had been insufficient to
move stranded people on streets since Wednesday, when rationing took effect.
"The question is if our dear officials enjoy or benefit from causing such
unexpected difficulties," it wrote.
Five gallons of gasoline has been selling for $15 in the black market in
Zahedan, in the southeast, the daily Seday-e-Edalat reported.
The Web site Norouz reported that riots had erupted in Ilam on the eastern
border and that people had attacked a gas station in Shiraz in the south.
Longstanding discount prices have encouraged gasoline consumption in Iran,
where many people believe that the vast oil resources make cheap gasoline a
basic right.
"There is no reason why we should pay the same price as people outside Iran
do," said Amir Aram, a carpenter in Tehran. "We have all this oil beneath
our feet and have to wait for hours in line to get our ration."
Some fear rationing could make inflation worse. Many people are dependent on
their vehicles as a source of income, and many jobless people or low income
government employees use their private cars as taxis.
Ahmadinejad is facing growing discontent over his economic policies and is
being blamed for failing to deliver on his promises to improve the economy.
He suffered a setback last December when he lost local elections, and he
faces crucial parliamentary elections in March.
"The government will have to back down or face consequences," said Ehsan
Mohammadi, 32, who uses his motorcycle to work as a delivery man. "There are
many people like me, and we cannot support our families with rationed
gasoline."
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