Iran imports 40% of their gasoline at $2 a gallon, then sells to the public at a highly subsidized 34 cents a gallon, up 25% in a month. The price hike combined with newly imposed mandatory rationing has led to two nights of rioting, with gas stations being burned and state-run agencies being attacked.
The problem is not that Iran lacks oil, but that it lacks refinery capability. Their government is, genuinely I’d say, nervous that countries they import oil from could choose to stop selling it to them. If so, the government could “collapse.”
So, the rationing is a preemptive strike to cut consumption. With a government this heavy-handed or desperate, the neocons don’t have to do much but just nudge the process along. This assumes that if the current government falls, that whoever replaces it will be friendly to the US, a doubtful assumption indeed. A more likely consequence would be another semi-failed state like Iraq.
And check out Joe Hartley’s insightful comments about this in our previous post on the topic.
Juan Cole has started a collaborative blog that’s somewhat broader than his on Informed Comment, and today’s post has a detailed background of the economic problems that have led to the current problems in Iran: http://icga.blogspot.com/. The article also shows that it’s not just capitalism that can take a short-sighted view of long-term problems!
A quick addendum to my comment of this morning, when I was rushed: I don’t see Iran as a failed or semi-failed state like Iraq or Afghanistan. (Indeed, if we got out, it’s not clear to me either of them would resemble, say, Somalia.) Persian cultural and nationalism are strong and vibrant, as evidenced by the rallying around the mullahs and the nuclear program against US bullying. (Patriotism, like everything else, has its price.) It’s hard to imagine a nationalistic and cohesive people like the Iranians falling apart, even after 30 years of religious oppression on top of 50 years of political oppression and 300 years of colonial interference by Britain and Russia.
Remember also that China is now heavily involved in Iran, which adds another dimension to the matter. The Iranians may hate the mullahs, but they also still hate the Shah, and with good reason, and with the Chinese investing, it’s hard to see how we can just waltz in, even assuming we had the troops, which we don’t. And Iran is huge.
Ironically, the Iranians are our natural allies in the area because they are probably more like Americans than any other of the tribal societies in the region, which makes the aftermath of the fall of the Shah even more unfortunate.