Gasoline Shortages In Iran
This is what I would call turn about being fair play. The number 2 oil exporting country in the world is facing a gasoline shortage that is costing them billions of dollars every year. Iran is selling gasoline for $0.08 (yes that 8 cents) per gallon. What is even more idiotic is there solution is to raise the price to $0.10 per gallon. This is a comedy of how not to run your country and reflects how a simple way of appeasing your population can turn into an expensive proposition.
The reason this is costing Iran money is that they only have refining capacity to make to make 42 million liters of gasoline per day while their consumption is 70 million liters. Now the use of metric in an article for American readers is absurd. You would think that the author would have the brains to translate the number into gallons, if for no other reason than that is how things are measured here. But no, 42 million liters (they spell it litres like the French) is a much bigger number than 10.5 million gallons (a liter is close enough to a quart to call it square). But I digress. So Iran is importing gasoline to meet its demand all the while they are exporting petroleum at ever increasing prices. To top it off, Iranians are buying the cheap gas and driving it across the borders to neighboring countries and selling it at higher prices. Gotta love free enterprise.
Now I see several options to fix this problem. Iran is going to raise gas prices by 2¢ per gallon and limit the quantity that can be purchased at that price. Any quantity purchased after the limit would be at a higher price. This smells like rationing and price controls and does a raspberry in the face of capitalism. Another, possible, even logical option would be to build refineries to meet the demand. They have the oil money and the technology. After all, aren’t they chasing the nuclear dream? The refineries would provide jobs and provide the much needed gasoline. Another is they could stop subsidizing the price of gasoline and let it float at what the market would bear. This might aggravate the population but when has Iran cared about keeping its population happy. When will nations learn that the market is the most effective way to distribute goods? Hording, rationing and price controls are what led the USSR to its destruction. Even Red China has found it is easier and more profitable to let the market flow.
I look forward to the day when the gasoline engine is in the museum and the natural resource this is petroleum will be nothing more than a footnote in the history books. With their economic wealth gone, there will once again be camel trains crossing the desert. Instead of using their power to bully, they would be much further ahead if they developed their economies. I guess Allah has not provided that vision as the way of the future. Well, since there are not any virgins involved, it must not be as important as blowing up Americans.
(Click on the heading to get to the article)
Icool
Cobb
The reason this is costing Iran money is that they only have refining capacity to make to make 42 million liters of gasoline per day while their consumption is 70 million liters. Now the use of metric in an article for American readers is absurd. You would think that the author would have the brains to translate the number into gallons, if for no other reason than that is how things are measured here. But no, 42 million liters (they spell it litres like the French) is a much bigger number than 10.5 million gallons (a liter is close enough to a quart to call it square). But I digress. So Iran is importing gasoline to meet its demand all the while they are exporting petroleum at ever increasing prices. To top it off, Iranians are buying the cheap gas and driving it across the borders to neighboring countries and selling it at higher prices. Gotta love free enterprise.
Now I see several options to fix this problem. Iran is going to raise gas prices by 2¢ per gallon and limit the quantity that can be purchased at that price. Any quantity purchased after the limit would be at a higher price. This smells like rationing and price controls and does a raspberry in the face of capitalism. Another, possible, even logical option would be to build refineries to meet the demand. They have the oil money and the technology. After all, aren’t they chasing the nuclear dream? The refineries would provide jobs and provide the much needed gasoline. Another is they could stop subsidizing the price of gasoline and let it float at what the market would bear. This might aggravate the population but when has Iran cared about keeping its population happy. When will nations learn that the market is the most effective way to distribute goods? Hording, rationing and price controls are what led the USSR to its destruction. Even Red China has found it is easier and more profitable to let the market flow.
I look forward to the day when the gasoline engine is in the museum and the natural resource this is petroleum will be nothing more than a footnote in the history books. With their economic wealth gone, there will once again be camel trains crossing the desert. Instead of using their power to bully, they would be much further ahead if they developed their economies. I guess Allah has not provided that vision as the way of the future. Well, since there are not any virgins involved, it must not be as important as blowing up Americans.
(Click on the heading to get to the article)
Icool
Cobb
posted by Cobb at
2:04 PM
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