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Last Updated: Friday, 6 July 2007, 15:15 GMT 16:15 UK
Iran ends petrol-only car making
A traffic jam in Tehran
More than 1m vehicles were manufactured in Iran last year
Iran has announced that it will stop producing purely petrol-driven cars and produce more dual-fuel vehicles, which also run on gas.

The minister of industries said the production of petrol-only cars would stop in just over two weeks' time.

Correspondents say it is not clear whether Iran can produce enough gas, or supply it to petrol stations.

The government introduced petrol rationing last week, a policy which provoked widespread anger and violence.

The move was an attempt to reduce the large subsidies the government spends on petrol and to limit the country's rising petrol consumption.

Infrastructure missing

In an unexpected announcement, Industries and Mines Minister Ali Reza Tahmasebi said all vehicles produced from 23 July onwards would have dual-fuel facilities installed.

An oil refinery and petro-chemical complex in Iran (file photo)

Dual-fuel cars can run on Compressed Natural Gas (CNG) or petrol.

"The automobiles which have been supplied to the market prior to this will gradually be converted to dual fuel too," Mr Tahmasebi added.

Last year, some 1,150,000 vehicles were manufactured in Iran.

The BBC's Jon Leyne in Tehran says the move will reduce demand for petrol and could help ease the capital's notorious pollution.

But it is not clear the infrastructure is in place yet, either to produce enough gas or to provide enough filling stations, our correspondent says.

There is already a long list of people waiting to have their cars converted from petrol-only to dual-fuel.

Black market

The government also hopes the switch to dual-fuel will provide relief for motorists affected by petrol rationing, as there are no limits on the supply of CNG.

Iran is one of the world's biggest oil producers, but has to import about 40% of its petrol because of low refining capacity.

If you want to buy petrol illegally from the black market you have to pay seven times the price.
Iranian motorist

Until recently, the imported petrol was sold on to motorists in unlimited amounts at a heavily subsidised rate, costing the government billions of dollars a year.

Ordinary motorists are now limited to 100 litres of subsidised fuel a month, or around three litres a day.

Some are struggling to cope and there are reports of a black market in petrol, with some people selling on their allocation at a profit.

"My work place is far away from my house and I have to drive there every day," one woman driver told the BBC. "Since rationing was introduced, the three litres a day isn't enough."

"If you want to buy petrol illegally from the black market you have to pay seven times the price."

Iran's police chief has said there were signs that petrol was being smuggled into Iran from abroad.

But officials have said rationing is still having a positive effect. Since it was introduced, petrol usage has dropped by 20-30% in many parts of Iran.




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