Iran Having Major Problems

It looks like it might be easier to get our way with the Iranians over their nuclear program after all. The Iranian government gave it's citizens a 2 hour notice that they will be limited to 100 liters of gas per month on fears that the US will seek sanctions on their oil imports. That's about 25 gallons a month. To give you an idea, I use approximately 50 gallons per month and I get about 35mpg roughly in my modern Honda Civic.

Most cars I've seen are older ones that don't get such good gas mileage, so as you can imagine, there were riots in the streets.

Despite its huge energy reserves, Iran lacks refining capacity and it imports about 40% of its petrol. The country has a large budget deficit largely caused by fuel subsidies and the inflation rate is estimated at 20-30%.

Now, take away 40% of anyone's gas supplies and you have wildly increased gas prices. No one is going to take that lying down.

During the night, cars were set alight and petrol stations vandalised while, in the capital, a supermarket and a bank were also attacked. "Guns, fireworks, tanks, [President] Ahmadinejad should be killed," chanted angry youths, throwing stones at police.

:) Iran's petrol is heavily subsidised, sold at about a fifth of its real cost.

So imagine if gas suddenly went from $3.00 a gallon where it currently is in the US to $15 a gallon almost over night. You can see why people are upset. They have really no where to go as refineries take years upon years to complete even if there was a site and money available to construct one.

The US, which is leading efforts to pressure Iran to suspend its uranium enrichment activities, has said Iran's fuel imports are a point of "leverage".

Sometimes you can get your way with rogue nations without firing a shot. This might be one of those times. Only time will tell though.

Travis
travis@rightwinglunatic.com