Iran: oil producer that buys fuel from abroad

Teheran wants independence for nuclear energy but it does not have the structures to refine its oil production, which is dropping. The political price imposed on imported fuel is causing a hemorrhage in public funds.

Teheran (AsiaNews) – "A gift of God for the Iranian people": this is how Ayatollah Khomeini described oil, and in Iran, a litre of fuel still costs less than a litre of drinking water: eight euro cents. Fuel is not only tax free, it is subsidized by the state: this scenario generates border trafficking and allows many Iranians to own a car and to be "private" taxi drivers in the absence of efficient means of public transport.

Iran lays claim to independence in the entire production cycle of nuclear energy, but it is incapable of refining its own oil: 30 out of 70 million litres consumed per day must be imported. Each litre that is re-imported costs the Iranian state 40 euro cents per litre: 20% more than in 2005, as Hojjatollah Ghanimi Fard, international affairs director of the National Iranian Oil Company, confirmed yesterday. Due to price increases, the 2.5 billion dollars allocated by the annual budget to these imports will only last until mid-August.

On the other hand, oil price hikes, fuelled by instability and by Iranian provocations, should lead to gains of 54 billion dollars for Iran this year, continued Ghanimi Fard. This automatic income will certainly help to finance many things in Iran, but it will also weaken the economy and feed inflation. Oil production, increasingly expensive on the market, is becoming more and more costly and difficult: in the Iranian GDP (Gross Domestic Product), oil is no longer a motor of economic growth: only +0.6% last year (compared to +5.4% of the Iranian GDP). Iranian oil production is decreasing.

In this scenario, Iran's domestic "free" petrol policy is irrational, especially if considers that 250,000 litres are wasted by gas station clerks alone! In Iran, cars, mostly very old and not catalyzed, have a very high consumption and they create huge ecological problems. Nearly 10,000 people die in Teheran each year because of air pollution. For Iran, the badly managed manna of oil is not only a curse for the economy in the medium-term; it is one of the roots of a human and social problem.

• iran
• oil
• price
• fuel
• importatation
• budget
• gdp
• pollution