Thursday, January 27, 2011

Iran halts production of gasoline at petrochem plants on reduction of fuel

Iran has halted production of gasoline at petrochemical plants after a reduction by the Government in fuel subsidies that led prices to quadruple and consumption to fall, as per Bloomberg. Iranians now pay 4,000 rials (40 cents) a liter of gasoline for up to 50 liters a month, and 7,000 rials a liter for larger quantities. Until fuel subsidies were cut, people paid a subsidized price of 1,000 rials a liter for a monthly maximum of 60 liters. Demand for gasoline in Iran has started to dwindle after the government cut fuel subsidies on Dec. 19. Additionally, Iran’s gasoline reserves have reached a peak amid expected completion of refinery projects in coming months, providing the country a robust supply of gasoline.

As an emergency plan to counter UN sanctions on fuel supplies, Iran started producing gasoline at six petrochemical facilities. About 17 million liters a day of gasoline was produced at the petrochemical complexes for almost 5 months. The United Nations has imposed four rounds of economic sanctions on Iran due to its refusal to curtail its nuclear energy program, perceived by many nations as a threat to develop weapons. The Iranian government maintains it wants nuclear energy solely for civilian purposes such as generating power.

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