THE WALL STREET JOURNAL REPORTS:
Iran sits on one-tenth of the world’s known oil supplies but is using so much energy these days it may start rationing gasoline as soon as next month.
Part of the reason lies with people such as 42-year-old Seyd Jessem Moosavi. No one in Mr. Moosavi’s family had an automobile when he was growing up. He was the first to buy one, followed quickly by his father. Now all five of his brothers have cars, and Mr. Moosavi just bought one for his 25-year-old son. . . .
Iran’s leaders are keenly aware of these problems. But in recent years, they’ve avoided making difficult choices as global oil prices climbed. Export revenues rose even as the amount of oil exported has remained steady or even fallen. . . . Nonetheless, the situation is already wreaking havoc with the government’s budget. Iran subsidizes most energy, including gasoline, diesel and many other refined products. Consumers and businesses alike benefit. Overall, energy subsidies cost the government as much as $40 billion, equivalent to almost a quarter of the country’s entire economic output, according to Bijan Zanganeh, a former Iranian oil minister. That spending is fanning inflation in the broader economy. “It’s unacceptable and it can’t continue,” he says.
Yet in Ahvaz, it’s clear that pushing oil and gas production higher and demand lower won’t be easy. Khuzestan province, the center of the country’s energy industry, already generates 17% of Iran’s electricity. But that’s not enough to keep electricity flowing here in the provincial capital all the time.
I’d like to believe that this will topple the mullahs, or render them more tractable, but that’s not clear.