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Last Updated: Friday, 23 June 2006, 11:48 GMT 12:48 UK
Iran calls halt to petrol imports
Petrol pump
Petrol is very cheap for Iranian motorists
Iran is to stop importing petrol from September and instead start rationing the fuel, its oil minister has said.

The move comes as Tehran seeks to reduce the billions of dollars it spends each year on petrol imports due to a shortage of domestic refineries.

While Iran is the world's fourth largest oil producer, it currently can only produce 57% of the country's daily petrol consumption.

The news comes as Iran continues its nuclear stand-off with the West.

Heavily subsidised

Petrol imports are an expensive problem for the Iranian government because it heavily subsidies its domestic petrol prices.

A litre of regular petrol in Iran currently costs just 800 rials (9 cents; 5p).

This problem has intensified for Tehran due to an upsurge in petrol demand caused by a big rise in car ownership, and increased petrol consumption to Iran's neighbours, where prices are far higher.

Iran's oil minister Kazem Vaziri Hamaneh said the decision to start rationing petrol was preferable to rising prices.

The country's ongoing nuclear row with the West centres on Iran's attempts to build its first nuclear power station.

While Tehran insists its ambitions are solely power generation, the US and Europe fear Iran wishes to develop nuclear weapons.

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