Iran bracing for gas sanctions

TEHRAN, Nov. 19 (UPI) -- U.S. sanctions targeting Iranian gasoline could be overcome by tighter restrictions on fuel usage and increased production, but at a cost, ministers said.

Iranian Oil Minister Massoud Mir Kazemi said production from domestic petrochemical plants could increase by 3.6 million gallons to 15 million gallons per day to counteract any sanctions.

He told the Mehr news agency, however, that domestic production was more expensive than importing gasoline.

"The cost of gasoline production in petrochemical plants is 30 to 60 dollars higher per ton compared to imported gasoline," he said.

U.S. lawmakers in October passed the Iran Refined Petroleum Sanctions Act targeting firms conducting business in the Iranian energy sector.

The U.S. State Department said the measure raises sovereignty issues, however.

Nevertheless, Iran has moved forward with plans for eventual pressure from the U.S. sanctions regime, including driving restrictions and quotas on fuel consumption.

Iran in March slashed the quota for private motorists from 31 gallons to 26 gallons per month. The latest reduction set for December restricts drivers from purchasing more than 21 gallons of fuel per month.

Iran sits on some of the largest oil and gas reserves in the world but relies on imports to meet 40 percent of its domestic gasoline demand.