Some 40 percent of domestic demand for gasoline is met from imports.

TEHRAN, Jan. 30--Iran’s gasoline production capacity will rise to 140 million liters a day in five years, once the projected $14-billion investment in refinery construction and rehabilitation schemes is realized.
According to ISNA, Mohammad Reza Nematzadeh, deputy oil minister and managing director of National Iranian Oil Derivatives Production and Distribution Company further told a Seminar on Offering Plans for Constructing and Rehabilitating Refineries that the country is expected to face a huge 10.5-percent hike in gasoline consumption, underscoring the need to rectify consumption patterns and boost production.
“The ever-increasing gasoline consumption has prompted the government to take necessary measures to increase gasoline production capacity from the current 40 to 140 million liters a day over the next fiver years,“ he said, adding that a technological improvement in gasoline production processes will help decrease heavy derivatives output and increase production of petrol and other light derivatives.
He said with the implementation of refinery rehabilitation schemes, the production ratio of gasoline to other oil derivatives will jump from the current 16 to 35 percent.
Gasoline consumption has reached record highs in Iran.
Bahman Arman, a senior economist, told ISNA earlier that a 13.3 percent growth has been witnessed in gasoline consumption during March-December 2005 against the figure for the corresponding period a year earlier.
“This is unprecedented not only in Iran, but also in the whole world,“ he said, adding that once known internationally as a major exporter of oil derivatives, Iran has now turned into one of the world’s largest gasoline importers.
Iran has to meet its need for gasoline from countries such as China, United Arab Emirates, Kuwait or Saudi Arabia. The country is paying four billion dollars a year on petrol imports.
Arman said the parliamentary move to keep prices of goods and services unchanged is meant chiefly to keep people satisfied, blaming it for the high gasoline consumption.
Each liter of gasoline sells for about 11 cents in Iran, which has one of the cheapest petrol prices in world.
Oil industry experts warn that the country is expected to be forced to import not just gasoline, but also oil and gas for domestic use next year, if consumption continues to grow fast.
Some 40 percent of domestic demand for gasoline is met from imports. Gasoline consumption hovers around 67 million liters a day.

TBILISI, Georgia,
Jan. 30--Iran started exports of natural gas to Georgia on Monday in response to Tbilisi’s appeal for urgent help to ease a severe energy crisis brought about by explosions on a Russian gas pipeline last week, reported AP.
David Ingorokva, the president of Georgian International Gas Corp., said that taps had been opened on a pipeline from Iran to Azerbaijan, and that the first gas would arrive at the Georgian border around midday (0800 GMT) Monday.
Together with Azerbaijani gas supplies, the Iranian gas ’will be enough for heating plants to work at full capacity’, Ingorokva said.
Russia, meanwhile, resumed pumping gas to Georgia on Sunday after completing pipeline repairs, but supplies were held up by technical problems including a buildup of condensate in the pipes due to the outage and harsh weather in Georgia. US-allied Georgia has accused Russia of waging an energy blockade against it after two January 22 explosions tore through the main pipeline that transports Russian gas to Georgia, leaving millions of Georgians shivering in their homes in bitterly cold temperatures.
The misery was compounded by major electricity blackouts after the severe winter weather downed power lines and a unit at a power station in Tbilisi went out of action.
The gas and electricity crisis forced desperate Georgians to queue for kerosene and firewood to heat their homes amid the heaviest snowfall in years as daytime temperatures fell to -8?C (18?F).
Georgia scrambled to conclude a contract last week with Iran that will provide two million cubic meters (71 million cubic feet) daily for 30 days. Georgia hopes to agree on a long-term arrangement to reduce its dependence on Russia.

TEHRAN, Jan. 30--A senior Central Bank of Iran (CBI) official has said that the inflation rate reached 14.1 percent during June-September 2005, stressing that the figure showed a 1.3-percent decline against the figure for the preceding three-month period.
According to Fars news agency, Akbar Komeijani, deputy CBI governor for economic affairs, further said in a report to the minister of economic affairs and finance as well as the commerce minister and the head of Management and Planning Organization (MPO) that inflation rate had reached 15.4 percent during March-June.
He said that the inflation rate averaged 14.8 percent in the 12 months to late September 2004.
Experts unanimously agree that the high liquidity rate is to blame for inflation.
The CBI has sold seven trillion rials worth of participation bonds since March 2005. Ahmad Mojtahed, who heads State Banking and Monetary Research Center, said last week that the bonds were sold as part of efforts to control liquidity.
“As the (Iranian) year draws to a close, the government adopts certain measures to control liquidity,“ he said, adding that the government is expecting to have liquidity reduced by three trillion rials from the sales of SIM cards.
Mojtahed said the CBI is authorized to issue up to 16 trillion rials of participation bonds by March.
He said earlier that inflation rate will exceed 20 percent, if the Central Bank of Iran (CBI)’s policies to bring liquidity growth under control fail to produce the desired results.
Bonds are sold to encourage public participation in financing major projects implemented by the state. The banking system pays an annual 17-percent profit rate on the bonds.
Mojtahed put the inflation rate at 15 percent.

Investment in the construction sector will reach 80 trillion rials during the Fourth Five-Year Plan.

TEHRAN, Jan. 30--A top construction industry official said here on Monday that construction market is not facing recession, adding that if this were the case, the 750,000 couples who get married each year would be left homeless.
Shahram Salmasi, who heads the board of directors of Association of Mass Constructors, told ILNA that the number of constructions have increased in the past six months, which is indicative of the end of the recession era.
“It is possible that real estate business has declined, but the house rental market is going strong,“ he said, adding that recession will come to the housing market when no marriages take place.
The official further said that some 536,000 housing units were constructed in the year to March 2005, of which 200,000 houses were built in rural areas.
“Statistics suggest that constructions have certainly increased in number in the year to March 2006,“ he said, declining, however, to give the exact figures for this year’s constructions.
Salmasi said the construction sector is one of the most attractive industries for the banking system, stressing that more financial facilities must be channeled to profit-making business.
Investment in the construction sector will reach 80 trillion rials during the Fourth Five-Year Plan (2005-2010). The figure amounted to 45 trillion rials during the Third Plan (2000-2005).
Salmasi’s remarks come amid increasing concerns about the recession-plagued construction market. Experts say construction sector has wrestled with recession in recent months. This is while the industry’s financial turnover reached 300-350 trillion rials in the year to March 2005.
The banking system provides 15-20 percent of the construction sector’s financial needs. However, experts say even the new banking facilities have failed to bring the troubled market back to normal.
Iran will need 25 million new houses in the next 20 years.
At least one million houses have to be constructed each year to keep up with growing demand.

ZURICH, Switzerland, Jan. 30--UBS AG has advised Iranian clients to transfer their assets to Swiss private bank Julius Baer Holding AG, in which it holds a 21 percent stake, following UBS’ decision to cease business activities with the country earlier this month.
According to AFX, the bank, which has confirmed the reports, ceased business ties with Iran earlier this month, in part because of growing tensions over Tehran’s alleged nuclear program.
The bank’s decision was essentially an economic one based on a re-evaluation of the markets, a spokesman said at the time.
UBS has also advised its clients on other possible banks to do business with.
UBS still holds a 21 percent stake in Julius Baer, stemming from the disposal of its private bank units at the end of 2005.

TEHRAN, Jan. 30--Middlemen are to blame for the high fruit prices in Iran, said the deputy head of the Association of Exporters of Fruits, Vegetables and Flowers here on Monday.
Seyyed Reza Nourani said the middlemen have caused fruit prices to go up by three to four times the actual prices, stressing, however, that the return home of Hajj pilgrims, the increasing number of marriages, the snow storms that have closed many roads across the country and the government’s decision to buy and stockpile 33,000 tons of fruits have also played a role in the recent fruit price hikes.
He said the fruit import duties will decrease from the current 30 percent to four percent next month to offset the possible shortage of supply in the last two months of the Iranian year (February and March).
“Middlemen exist in all economic activities and the fruit market is no exception,“ he said, adding that the government has failed to prevent middlemen from disrupting the fruit market.
He also criticized the government for untimely decisions regarding fruit imports, stressing that in most countries heavy tariffs are levied on fruit imports during the harvest season.
“But in Iran, imports begin when fruits are still on trees in Iran,“ he said, adding that the country will most likely not face a shortage of fruit supplies on the (Iranian) New Years’ eve.
Nourani said fruit exports have decreased by 1.5 percent since 10 years ago, when the country used to export 3.5 percent of its total annual 23-million-ton production.
“This year, Iran exported only two percent of its 30 million tons of fruit output,“ he said.
Experts say that fruit production can easily meet national demand. However, irregularities in distribution and sales have caused severe supply disruptions.
Iranians had to buy imported fruits in recent months when the fruit market faced a shortage of supply due, in part, to early frosts that hit the country last winter.
Although Iran, based on figures released by FAO, is among the world’s 10 top countries in terms of production of fruits and vegetables, exorbitant fruit prices continue to exert further financial burden on low-income sections.
FAO figures suggest that Iran is the seventh largest fruit producer in world.

TEHRAN, Jan. 30--Iran and Uzbekistan have pledged to increase their software cooperation following a memorandum of understanding (MoU) signed recently between the two countries’ IT authorities.
According to ISNA, the MoU was reached at the Seventh Meeting of the Joint Iran-Uzbekistan Commercial, Economic, Technical and Cultural Cooperation Commission in Tehran.
As per the MoU, the two sides will undertake to promote economic transactions and establish a representative office of Iran’s Software Exporters Association in Tashkent, Uzbekistan.
The MoU also commits the two countries to undertake joint ventures in the information technology sector and hold specialized exhibitions and seminars in this respect.
At the joint cooperation commission meeting, the Iranian Ministry of Information and Communications Technology announced its readiness to participate in major telecommunications projects in the former Soviet republic.
The ministry has also expressed its willingness to train Uzbek telecoms industry personnel.
Nasrollah Jahangard, secretary of High Information Dissemination Council, told reporters earlier that the national IT market’s turnover has decreased due to the financial recession, adding, however, that the sector can participate in regional software markets, especially those in Iraq and Afghanistan.
“If we are going to enter these markets, we have got to speed up our efforts in this respect,“ he said, adding that the Afghan market will help Iran’s entry into the international software market at lowest costs.
Jahangard said that software companies need to develop global interactions also by participating in international consortia.
There are 500 software companies in Iran.
The total value of Iran’s software production and services market reached $400 million in March 2004-2005, when exports reached $10.9 million.
There are plans to increase software exports to $100 million a year by March 2007.

SINGAPORE, Jan. 30--Oil prices climbed half a dollar to above $68 a barrel on Monday, shrugging off a likely rollover in OPEC production to focus on key talks over Iran’s nuclear program and more militant attacks in Nigeria, according to Reuters.
US light crude climbed 46 cents to $68.22 a barrel after soaring $1.50 a barrel on Friday. Prices are up more than $7 this year and touched $69.20 a barrel a week ago, the highest since Hurricane Katrina hit the US Gulf Coast last summer.
London Brent crude climbed 55 cents to $66.79.
OPEC’s meeting in Vienna on Tuesday is being overshadowed this week by talks on Iran, with the United States and European Union powers gathering later on Monday to try to convince Russia and China to back tough diplomatic action to prevent Tehran from continuing its nuclear activity.
On Thursday, the UN’s International Atomic Energy Agency will hold an emergency session at which the board could decide to send Iran to the UN Security Council, a move traders fear could prompt Tehran to consider using its oil as a political weapon.
“The market has the same buy factors--Iran and Nigeria--and now increasing tension ahead of the IAEA meeting could drive the market higher,“ said Naohiro Niimura, vice president of the derivatives unit at Mizuho Corporate Bank in Tokyo.
Concerns over supplies from the world’s fourth-largest exporter, as well as lost output from Nigeria, have added fuel to a market ignited by a new flood of fund money into the commodities complex, which has performed strongly for two years.
Last week’s robust US inventory levels, a pledge from Saudi Arabia to fill supply gaps and the promise of an emergency release from Western government stockpiles if Iran or Nigeria halted exports failed to reverse the rally.
Although OPEC producers remain concerned over the seasonal dip in second quarter demand, most agree the Organization of the Petroleum Exporting Countries has little choice but to keep output steady at near a 25-year high when it meets on Tuesday.