Thursday, June 28, 2007

Unrest grows amid gas rationing in Iran Unrest grows amid gas rationing in Iran

Unrest grows amid gas rationing in Iran points out that things are not going well right now for the Iranian government:
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.
And this is primarily a result of trying to ignore basic economics:
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.
..
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.
This would not be a problem if mass transit were available, but that, along with refinery capacity, were never properly funded. So, Tehran at least has about half the buses it needs, and the people don't have the gas to get to work. But the gas they do get is cheap.

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