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Friday, June 29, 2007

Iran's fuel rationing sparks worst riots since 1999

Iran is battling widespread violent unrest in wake of a decision to launch fuel rationing.

Riots erupted in major Iranian cities after the government of President Mahmoud Ahmadinejad introduced gasoline rationing. In many cases, rioters torched gasoline stations and state-owned banks in response to the huge lines.

The riots, regarded as the worst since student protests in 1999, have spread to Ilam, Shiraz and Teheran. On Thursday, rioters, accusing the government of corruption, attacked banks and business centers as police acknowledged that they had not been prepared for the wave of unrest.

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[In Washington, Congress introduced a bill that would sanction any company that provides Iran with gasoline, Middle East Newsline reported. House sponsors said the fuel riots pointed to the vulnerability of the Ahmadinejad regime.]

"The question is if our dear officials enjoy or benefit from causing such unexpected difficulties?" the Iranian daily Etemad Melli asked.

The government has deployed tens of thousands of police and security forces in Iranian cities to quell the violence. For the first time, Iranian protesters denounced Ahmadinejad, elected in 2005.

"Paying around $10 billion from the oil stabilization fund to compensate for the cost of importing oil in the past two years and then submitting to gasoline rationing is the mistake," former Iranian parliamentarian Hossein Marashi said. Deputy Oil Minister Mohammed Reza Nematzadeh pledged that the rationing system would be reviewed periodically. The Oil Ministry has determined that fuel rationing would save $9.5 billion per year.

"Gasoline rationing for private cars needs to be increased in the next six months," Emad Hosseini, spokesman for parliament's Energy Committee, said. "This issue should be reviewed by experts and adjusted based on the realities in Iran."

Iranian fuel consumption exceeds gasoline production by 75 percent. For years, Iran, which imports fuel from 16 countries, has heavily subsidized gasoline while parliament rejected government attempts to raise prices.

"If this parliament had not frozen the annual price hike for petrol we would not be facing the gasoline rationing now," Marashi said.

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