Iran says to be self reliant in gasoline in 2011

Iran will finally become self sufficient in gasoline later this year, no longer reliant on imports or "emergency" fuel produced in petrochemical plants, its oil minister said on Sunday.

Iran said in September it was no longer importing the automotive fuel which had become subject to sanctions and that it was making up the shortfall by producing gasoline in chemical factories.

Oil Minister Massoud Mirkazemi told a news conference that Iran, which had previously imported 30% to 40% of its gasoline consumption, would start inaugurating new refinery capacity every month, starting from February.

"Later in this year, we will become self-sufficient thanks to the gasoline produced by our refineries and will no longer be reliant on either imports or petrochemical units," he said.

Foreign analysts said they doubted the sustainability of the emergency refining plan and Iranians complained of worsening air quality in major cities, something many people suspected was at least in part due to the sudden use of lower-quality fuel.

Mirkazemi blamed Iran's foreign foes for spreading that idea. "It is a ridiculous claim raised by those countries which believed that by imposing sanction on gasoline, we would face problems."

As well as boosting refinery capacity, Mirkazemi said a cut in state subsidies which pushed up the pump prices by as much as seven-fold in December would help Iran achieve the self-sufficiency goal by suppressing demand.

Iran's daily consumption has fallen to between 52 and 53 million litres, he said, compared with around 61 million before the subsidy cuts.

Mirkazemi also said Iran's gasoline stocks were high.

"Our stockpile is at its highest and nothing would happen if we did not import (gasoline) for a long time," he said.

In another sanction-related development, Mirkazemi appeared optimistic about prospects for resolving a dispute with India over payment for crude oil.

Reserve Bank of India said last month payments for Iranian oil imports could no longer be settled using a long-standing clearing house system, a move apparently linked to US sanctions on Iran which it fears is seeking nuclear weapons, something Tehran denies.

"The job can be done by changing the banks," he said. "By changing the methods ... no problem will exist any longer, although we know that India is under heavy pressure from the Americans."

India's Oil Secretary S Sundareshan said on Wednesday he was "absolutely confident" that the row -- which could block imports of 400,000 barrels per day -- would be settled in coming days.