[Cowperson]

As expected, more economic turmoil in Iran:

Two gas stations were torched early Wednesday in Tehran as angry Iranians protested fuel rationing measures suddenly enforced by the government, while many other Iranians lined up to fill their tanks.

Iran has plenty of oil — it is the world's fourth largest producer — but it has only enough refineries to make 60 percent of the gasoline it needs, reports CBS News correspondent Elizabeth Palmer.

To supply the rest, it is forced to export crude oil by tanker to other Persian Gulf countries, have it refined there, then re-import it, at a huge extra cost.

At the moment, Iranian drivers pay 38 cents per gallon at the pumps, thanks to heavy government subsidies, reports Palmer The average cost to produce that gallon is $1.15 — which means the Iranian state is paying a 77-cent subsidy to consumers for every gallon sold.

That adds up to $16 billion every year that Iran, with its economy already battered by United Nations-imposed sanctions, can ill afford.

Professor Sadegh Zibakalam, a respected political scientist from Teheran University, tells CBS News, "the subsidy that the government pays for gasoline is nearly 20 times what it's spending on health. It's obvious that this is crazy, but any government who ends this subsidy — which has been with us since the time of the shah — would become immensely unpopular... So no one wants to do it."

http://www.cbsnews.com/stories/2007/...n2986019.shtml

BBC says 12 gas stations torched.

http://news.bbc.co.uk/2/hi/middle_east/6243644.stm

Cowperson