Posted by: Tony Carson | 12 September, 2007

Gas rationing — tough times in Iran

Gas rationing imposed in June by Iran President Mahmoud Ahmadinejad is proving ruinous to the Iranian economy.

One litre of gas in the free market is now the equivalent of $5US compared to 40¢ just a few weeks ago. This has inflated all costs and made transportation through the country for tourists so prohibitively expensive travel levels have dropped precipitously.

As this article, Iran’s traders hit by petrol prices, in the GuardianWeekly points out “30,000 traders (are) reported to be near bankruptcy this year in the normally flourishing Mashad markets. The monthly rental of a small stall has gone up from £200 to £4,000, while at the same time demand has dropped by as much as 50%.

Mashad, located 850 kilometres north east of Tehran and with a population of just over two million, is one of the main holy cities of Iran.

Most traders describe this year’s business as dreadful, and many expect to go bankrupt if things don’t get better. Some even claim their profits have dropped to one fifth of last year’s figure. Sadeqi in the ‘International Bazaar’ says his profits have halved this year. “We didn’t even have enough to pay our rent,” he told me. Another trader, Ashrafi, working in Reza Market says: “I may soon have to sell my car and perhaps even my house if things don’t get better.”

Iran, of course, has significant gas reserves but hasn’t the technology to develop them.

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