Sacked Iran minister warns of energy 'catastrophe'

Agence France Presse
August 19, 2007

Iran's sacked oil minister has issued a parting warning to President Mahmoud Ahmadinejad, predicting a looming "catastrophe" in the Iranian energy sector because of high consumption, media reported Sunday.

"If we do not find a solution to the energy problem in the next 15 years, the country will face a catastrophe," Kazem Vaziri Hamaneh was quoted as saying at his farewell ceremony late on Saturday by the ISNA student news agency.

"I am ready to prove that if the fuel situation continues along current trends we will face an energy crisis in the future," he said. "The current pattern of consumption is a disaster for the country."

The comments by Vaziri Hamaneh, who also revealed for the first time that he was sacked in a cabinet reshuffle last week, are a stark warning about the energy problems of a country rich in natural resources.

Iran is OPEC's number two crude oil producer and is also pinning major hopes on its gas reserves, estimated to be the second largest proven reserves in the world after Russia.

But frenzied consumption of petrol forces it to import millions of litres per day of refined oil to make up for a domestic shortfall. Wasteful heating methods also create gas shortages in winter.

The government introduced petrol rationing in June in a bid to ease the immense strain on the budget of importing petrol for Iran's 70 million people, but it is still forced to import huge quantities of petrol daily.

A further problem comes from under-investment in its oil fields, an issue compounded by US action to prevent banks lending to Iran over its controversial nuclear programme.

The influential research centre of parliament also sounded a downbeat note on the future of Iran's gas industry, saying that exports would not be possible in the next 10 years given the scale of domestic consumption.

"It seems that for at least the next 10 years there will not be any extra gas for export. Iran is advised to remove gas export from the country's policy due to the limited production capacity," it said.

Turkey is currently the only recipient of Iranian gas exports, receiving several billion cubic metres annually.

But Iran is seeking to export large quantities of gas to Turkey and other countries in the Middle East, as well as to India and Pakistan through new pipelines.

Vaziri Hamaneh confirmed for the first time that he was sacked in the reshuffle, which also saw the departure of Industry Minister Alireza Tahmasebi and was seen as a bid by Ahmadinejad to step up his control over the economy.

"I did not resign, because I still have the ability to work. Anyone who has the ability to work will not resign," Vaziri Hamaneh said, according to the Mehr news agency.

"Sacking me from the ministry was the president's idea, and I obliged," he added.

Vaziri Hamaneh is a veteran oil ministry official who was Ahmadinejad's fourth choice for the post when he took power in 2005. Two candidates were rejected by parliament and another stepped back of his own accord.

He complained that in the "two years of Ahmadinejad's government, oil managers had been forced to pay for all mistakes made in the past.

"And I say here if these group's pressures are not stopped, the industry and the country will face crisis."

Tahmasebi also launched a stinging attack on Ahmadinejad's economic policies in his resignation letter, complaining of under-investment and damaging personnel changes.