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Posted: 7/23/2008 5:10:58 AM EDT
Iran to increase refining capacity
Tue, 22 Jul 2008 10:19:15

Iran is set to sharply increase its refining capacity in an attempt to cut gasoline imports and ease the burden on state coffers.

"Iran has invested 15 billion euros to build seven new refineries," said Aminollah Eskandari, a director at the National Iranian Oil Refining and Distribution Company on Monday. "Seven billion dollars are also allocated to boost the capacity of the existing refineries."

The country's refining capacity, Eskandari said, could double to 3.3 million barrels per day (bpd) in 2012 from the current 1.56 million bpd.

Iran, the world's fourth largest oil producer, lacks adequate refining capacity to meet domestic demand. The country is predicted to spend above $7 billion this year on imports of heavily-subsidized gasoline.

Iran plans to cut domestic consumption by introducing a gasoline rationing program and doing away with energy subsidies.

Under the rationing scheme, fuel is sold at 1,000 rials (about 11 US cents) a liter. Since March, drivers can purchase more gasoline than their quota (120 liters a month for private cars) at free market price of 4,000 rials per liter.

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