Monday, May 24, 2010

Iran Says Any Western Gasoline Boycott Would Fail

Any Western bid to prevent Iran from importing the gasoline it needs would fail, a senior Iranian oil official said on Monday.

U.S. politicians are working on legislation to penalize fuel suppliers to Iran in an effort to pressure Tehran to halt sensitive nuclear work. Some traders and international oil firms are ceasing gasoline sales to the Islamic Republic.

But Hojjatollah Ghanimifard, deputy director of the National Iranian Oil Company, said refineries in the world would suffer losses unless they supplied the market with the gasoline they produced, the Oil Ministry website SHANA reported.

Iran would face no problems in importing fuel, he said.

The world's fifth-largest crude exporter imports at least 30 percent of its gasoline needs but says the construction of new refineries will boost domestic output and make it less vulnerable to any future sanctions targeting such trade.

"The procurement of gasoline on the international trade scene is easy for any country and, on the other hand, the level of derivatives imported into Iran is rather negligible compared to the total international transactions," Ghanimifard said.

Any gasoline boycott against Iran would be a "politically motivated scheme and those behind it know full well that its enforcement is futile from scientific and economic viewpoints."

He said most refineries were operating at 85 percent capacity and following the completion of their spring overhauls, their output would reach full capacity.

Like other Iranian officials, he expressed hope a government plan to phase out food and fuel subsidies would discourage consumption and help Iran turn into an exporter of oil products.

In the 2009-10 year, Iran produced 44.6 million liters of gasoline every day but consumed 64.9 million liters, forcing it to import the difference, according to official figures.

The West says Iran is using its atomic program to develop a nuclear bomb, while Iran insists it is for electricity.

Asia-based industry sources said earlier this month that Iran's gasoline imports in May were expected to drop by about 20 percent versus the previous month.

In April, senior management at Russia's No.2 oil company, LUKOIL, verbally instructed traders involved in gasoline sales to Iran to cease business activity with Tehran.

Malaysia's state oil company also said it had ceased sales to Iran.

But last month state-run ChinaOil sold two gasoline cargoes to Iran, the first known direct sales to the OPEC member. Previously sales from China were mostly done via third parties.

(Reporting by Hashem Kalantari; writing by Fredrik Dahl; editing by William Hardy)

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